Re Australian Industrial Relations Commission; Ex parte Construction, Forestry, Mining and Energy Union [2001] FCA 1816

AND: A FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CONSISTING OF THE HONOURABLE JUSTICE GEOFFREY GIUDICE, PRESIDENT, THE HONOURABLE JUSTICE ALAN BOULTON, SENIOR DEPUTY PRESIDENT AND PETER LAWSON, COMMISSIONER

APPLICANT/PROSECUTOR JUDGES: SPENDER, GRAY AND CONTI JJ

THE COURT ORDERS THAT:

1. The application be dismissed.
2. There be no order as to costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

AND: A FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CONSISTING OF THE HONOURABLE JUSTICE GEOFFREY GIUDICE, PRESIDENT, THE HONOURABLE JUSTICE ALAN BOULTON, SENIOR DEPUTY PRESIDENT AND PETER LAWSON, COMMISSIONER

1 I agree with the reasons for judgment of Gray J and with the orders his Honour proposes. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.

AND: A FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CONSISTING OF THE HONOURABLE JUSTICE GEOFFREY GIUDICE, PRESIDENT, THE HONOURABLE JUSTICE ALAN BOULTON, SENIOR DEPUTY PRESIDENT AND PETER LAWSON, COMMISSIONER

GRAY J: 2 This application raises issues of the conduct by the Australian Industrial Relations Commission ("the Commission") of the process known as award simplification. In particular, it raises issues as to whether the Commission failed to perform its statutory function and as to whether it denied natural justice to a party to the award concerned.

The awards 3 The Coal Mining Industry (Production and Engineering) Interim Consent Award, September 1990 ("the 1990 Award") was originally made by the Australian Industrial Relations Commission ("the Commission") pursuant to legislation then known as the Industrial Relations Act 1988 (Cth) ("the IR Act"). The 1990 Award remained in force under the IR Act. The Coal Mining Industry (Production and Engineering) Consolidated Award 1997 ("the Consolidated Award") was also an award made by the Commission. The date on which the Consolidated Award was made does not appear from the evidence. At the relevant times, the parties to the 1990 Award and the Consolidated Award were the Construction, Forestry, Mining and Energy Union ("the CFMEU"), which is an organisation of employees registered pursuant to the WR Act, and thirty-five employers engaged in the mining of coal ("the employer respondents"). 4 Clause 24.2 of the Consolidated Award provided as follows: "24.2 Length of Shifts 24.2.1 The employer can determine the shift length to be worked up to a maximum of eight ordinary hours. 24.2.2 Shift lengths greater than eight ordinary hours can only be implemented by agreement between the employer and the majority of affected employees."

The legislation 5 By the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) ("the WROLA Act"), the IR Act was amended to a very significant extent. One of the amendments was to change its name to the Workplace Relations Act 1996 (Cth) ("the WR Act"). 6 Part 1 of Sch 5 to the WROLA Act contained amendments relating to awards. A new s 88A(c) provided that the objects of Pt VI of the WR Act, dealing with functions of the Commission, included ensuring that: "awards are simplified and suited to the efficient performance of work according to the needs of particular workplaces or enterprises". 7 A new s 89A was inserted into Pt VI. This provided that, for the purposes of dealing with an industrial dispute by arbitration, preventing or settling an industrial dispute by making an award or order, or maintaining the settlement of an industrial dispute by varying an award or order, an industrial dispute is taken to include only certain specified matters. The specified matters (defined as "allowable award matters" by a definition inserted into s 4(1)) are twenty in number. By s 2(4) of the WROLA Act, Sch 5, and therefore the new s 89A, commenced on 1 January 1997. Section 89A operated prospectively from that date. That is to say, it had no effect on existing awards, of which the 1990 Award was one and the Consolidated Award, despite the date appearing in its title, appears to have been treated as one. 8 Part 2 of Sch 5 to the WROLA Act contained what are described as transitional provisions. Item 46 contained a definition of the phrase "interim period". The interim period is the period of eighteen months beginning on the day on which s 89A commences. In other words, the interim period expired on 30 June 1998. Item 49 provided for the variation of existing awards, so that they dealt only with allowable award matters, within the interim period. If such a process were undertaken, item 49 imposed on the Commission obligations in the following terms: "(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 facilitative 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 Item 49(9) gave the Commission power, if it determined that an award did not meet the criteria in subitems (7) or (8), to take whatever steps it considered appropriate to facilitate the variation of the award so that it did meet those criteria. 10 Item 50(1) provided that, at the end of the interim period, each award ceased to have effect to the extent that it provided for matters other than allowable award matters. Item 51 provided for the variation of awards after the end of the interim period. So far as relevant, item 51 provided: "(1) As soon as practicable after the end of the interim period, the Commission must review each award: (a) that is in force; and (b) that the Commission is satisfied has been affected by item 50. (2) The Commission must vary the award to remove provisions that ceased to have effect under item 50. … (6) 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. (7) The Commission must also review the award to determine whether or not it meets the following criteria: (a) where appropriate, it contains facilitative 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. (8) If the Commission determines that the award does not meet the criteria set out in subitem (6) or (7), the Commission may take whatever steps it considers appropriate to facilitate the variation of the award so that it does meet those criteria."

Proceedings in the Commission 11 On 26 May 1998, Boulton J, a Senior Deputy President of the Commission, published a decision which was said to relate to the first stage of the award simplification process. According to his Honour's reasons for decision, the decision related to both the Consolidated Award and the 1990 Award. His Honour also described the proceedings as having: "arisen out of action taken by the Commission on its own motion having regard to the provisions of items 47, 49, 50 and 51 of Schedule 5 of the [WROLA Act] and then upon application being made by the Queensland Mining Council and the New South Wales Minerals Council, on behalf of various member companies respondent to [the 1990 Award and the Consolidated Award]." 12 The decision did not deal with cl 24 of the Consolidated Award. His Honour did not make an order reflecting his reasons for decision until 1 July 1998, the day after the end of the interim period referred to in items 46, 49, 50 and 51 of Sch 5 to the WROLA Act. On that date, his Honour made an order varying the Consolidated Award, but not cl 24.2. His Honour also made an order varying the 1990 Award. 13 On 15 June 1998, on behalf of the employer respondents, the Queensland Mining Council and the New South Wales Minerals Council lodged a notice of appeal against the decision of Boulton J made on 26 May 1998. Although this appeal does not appear to have fallen within any of the provisions in s 45 of the WR Act, it was entertained by the Commission and was designated as matter C No 34202 of 1998. On 14 July 1998, the CFMEU lodged a notice of appeal against the order of Boulton J of 1 July 1998. This appeal was designated as matter C No 23970 of 1998. The two appeals were heard together by a Full Bench of the Commission, constituted by Senior Deputy President MacBean, Senior Deputy President Polites and Commissioner Harrison. The Full Bench published its decision on 22 October 1998. It varied the order made by Boulton J on 1 July 1998 in certain respects not relevant to the present proceeding. 14 In the meantime, what was described as the second stage of the award simplification process proceeded before Commissioner Harrison, who conducted a hearing on various dates in September, October and November 1998. On 16 July 1999, Commissioner Harrison published his decision. After quoting the whole of cl 24 of the Consolidated Award, relating to hours of work (of which cl 24.2, quoted above, was part), the Commissioner said: "[91] The employers sought to remove what they saw as inflexibilities in the clause pursuant to items 51(6)(a), (b) and (c). They relied on findings by Professor Meredith Wallace in her research paper entitled 'The effects of 12 hour shifts; Recent International and Australian Research'. They also submitted that the principles in the XPT case had application. [92] The union disputed the employer's assertion that the clause was inflexible. The Commission was directed to a similar clause arising out of the Award Simplification Decision in support of their claim that the clause was flexible. [93] The union also submitted that the Commission should not adopt the principles in the XPT case to the award simplification process. [94] The union also argued against amendments being proposed to those parts of the clause dealing with the preamble to the clause, shift lengths, spread of ordinary hours, starting and finishing times, RDOs. [95] It was contended by the union that the 'uncertainty of the effects of extended shifts mean it is important that employers and employees work together to ensure their safe implementation', that the Coopers and Lybrand report showed that 'there is doubt that 12 hour shifts are the most efficient means of arranging shifts to achieve continuous operations' and that the application to vary the hours clause of the award should be refused as: 'the applicants have failed to support the variation by reference to the legislation and principles. Furthermore the evidence is overwhelmingly against the variation.' Conclusions and Determinations. [96] The issue to be determined here is how to provide greater flexibility in the hours of work provision and efficient use of plant and equipment whilst ensuring protection to employees in shift lengths working patterns. [97] Whilst there has been considerable change at mine site levels to working time arrangements in recent times I have decided that the Hours of Work provision should be subject to the facilitative provisions referred to in paragraph 30 of this decision." The reference to facilitative provisions is a reference to a conclusion that the commissioner had reached earlier in his reasons for decision at [30]. It was that the parties to the 1990 Award and the Consolidated Award were to confer and agree on the precise wording of a new clause to include an index of facilitative provisions, in accordance with principles laid down by a previous Full Bench in a decision known as the Hospitality Decision (23 December 1997, Commission's print no P7500). 15 Commissioner Harrison did not make an order reflecting his decision of 16 July 1999 until 4 November 1999. The order varied the Consolidated Award in a number of respects, but did not vary cl 24. 16 On 5 August 1999, although no order had by then been made, the employer respondents filed a notice of appeal against the decision of Commissioner Harrison made on 16 July 1999. This appeal was designated as matter C No 22644. Paragraph 11 of that notice of appeal contained the following: "As to the application with respect to clause 24 of the Consolidated Award: (a) The Commissioner erred in failing to permit the flexibility's [sic] sought by the employers and in doing so disregarded the requirements of item 51(6) of the WROLA Act and the evidence. (b) The Commissioner erred in relying on his proposal to insert a general facilitative clause as such a clause is not a substitute for or, in general, an alternative to, properly prescribed award provisions meeting the requirements of item 51(6) and (7) of the WROLA Act and sections 143(1B) and (1C) of the Workplace Relations Act 1996." 17 Following the making of the order of 4 November 1999, the employer respondents filed a further notice of appeal against that order. This appeal was designated as matter C No 24465 of 1999. On the same day, the CFMEU filed a notice of appeal against the order of 4 November. This appeal was designated as matter C No 24466 of 1999. Neither of the notices of appeal filed on 25 November 1999 contained specific reference to cl 24 of the Consolidated Award. 18 On 22 September and 8 and 9 December 1999, a Full Bench of the Commission heard together the appeals in the matters designated C No 22644, C No 24465 and C No 24466 of 1999. The Full Bench consisted of Giudice J (the President of the Commission), Boulton J and Commissioner Lawson, who together are named as the first respondent in the present proceeding, and who have entered a submitting appearance in that proceeding. 19 One of the issues raised by the employer respondents in the course of the appeals was that of shift lengths. The employer respondents argued that Commissioner Harrison erred in not removing the existing award restriction on shift lengths in cl 24.2 of the Consolidated Award. The Full Bench had before it documentary evidence that had been tendered before Commissioner Harrison, some of it by the CFMEU and some by the employer respondents. It also had before it written submissions made to Commissioner Harrison by the CFMEU and by the employer respondents, as well as the transcript of oral submissions made to Commissioner Harrison by the CFMEU and the employer respondents. In addition, both written and oral submissions were made to the Full Bench by the CFMEU and by the employer respondents on the issue of shift lengths. It will be necessary to make reference to the content of the evidence and submissions in some detail later in these reasons for judgment. 20 On 18 May 2000, the Full Bench published its decision on the appeals. In its published reasons, it said: "[43] In the proceedings before the Commissioner, the employers sought various changes in the hours of work provisions. Perhaps the most significant change sought concerned the length of shifts." 21 The Full Bench then set out cl 24.2 of the Consolidated Award and continued: "[44] The employers sought the ability to work shifts up to twelve ordinary hours. It was submitted that the requirement, in effect, to work three shifts per twenty four [sic] hours in a continuous process industry constitutes an impediment to efficiency and productivity. It was said that the evidence before the Commissioner did not establish that 12 hour shifts would be unfair to employees. The evidence supporting 12 hour shifts included material relating to international and Australian studies on the effect of working 12 hour shifts and evidence about the arrangements in some Australian coal mines for working longer shifts. The concern of the employers was that the 8 hour limitation in the award enables the union in effect to place a price upon its agreement to the introduction of more productive working arrangements. [45] The CFMEU opposed the employers' case on health and safety grounds and on the basis of a Coopers and Lybrand report arising out of a trial of 12 hour shifts at the Vickery Coal Mine. This report cast doubt on whether such shifts are the most efficient means of arranging work to achieve continuous operations." 22 The Full Bench then set out what Commissioner Harrison had said in his decision and continued: "[47] In the appeal proceedings the Companies submitted that the Commissioner erred in not removing the existing award restriction on shift lengths. It was said that the Commissioner rejected the employers' case 'for no reasons which appear from his decision' and decided to make the question of hours of work subject to the facilitative provisions in the award. In so doing, the Commissioner failed to address adequately the issues arising under item 51. [48] The CFMEU submitted that the employers had not established a proper basis for varying the hours clause in the manner sought. It was also said that the Companies proposed to drastically alter the award provisions relating to shift lengths and the spread of hours while at the same time removing the need for agreement with employees on a range of issues. It was said that on the basis of the material submitted the Commission could not be satisfied that the facilitative arrangements regarding the working of ordinary hours (clause 24.1.2) and the length of shifts (clause 24.2.2) have not been appropriately utilised. [49] As referred to earlier, the focus of the issues raised in the appeals was the working of 12 hour shifts. In many respects the submissions in the appeal proceedings involved a repetition of what was put to the Commissioner. [50] In view of the inadequate reasons given by the Commissioner in his decision, it is appropriate for the appeal bench to examine the evidence and material presented and to reach conclusions on that material. We do not consider that the case has been made out for the hours of work clause proposed by the employers in the proceedings before the Commissioner. There were limited submissions put as to the effect which the various proposed changes would have and the need for them. [51] The main submissions in support of the employers' case for 12 hour shifts were to the following effect. Firstly the submissions addressed the safety concerns. It was said that the evidence against such shifts was almost solely confined to matters relating to safety. However the results of the research conducted into the effects of 12 hour shifts have been equivocal. Indeed some studies suggest various improvements with the working of 12 hour shifts such as beneficial changes in health problems, sleep after night shifts, family, social and work relationships, faster recovery after night shifts and alertness. Secondly, there is evidence about a variety of 12 hour shift arrangements in coal mines which have been achieved by agreement or, in a few cases, by arbitration. Thirdly, restrictions on shift lengths reduce flexibility and are a barrier to the introduction of more efficient shift rosters in the industry. The effect of the current award provision is that unions have an effective right of veto over an employer's right to instigate continuous operation in an efficient manner. In some cases the CFMEU has refused to give its consent to shifts in excess of eight hours unless large overaward payments are made. Fourthly, the working conditions in open cut and underground mines are vastly different. It is often the case that the work performed in surface locations is more conducive to longer shifts than that performed underground. Finally, it cannot be argued that extended shift lengths are harsh or unsafe as employees in coal mines are already working shifts of eight and a half, nine, twelve and twelve and a half hours on a regular basis and with the agreement of the union and employees. It was put that to restrict employers to eight hour shifts as an award right unduly restricts the efficiency of the industry and increases costs to employers. [52] The CFMEU submitted that the hours clause in the award is flexible and provides facilitative provisions which meet the requirements of item 51(7)(a). In particular, clause 24.2 provides that shift lengths greater than eight ordinary hours are subject to agreement between the employer and the majority of affected employees. The employers' proposal will allow a unilateral increase in shift lengths where currently there is a requirement to reach agreement with employees. There will also be an impact on employees' earnings as employees may be compelled by their employer to work twelve and a half ordinary hours, without overtime payments. The evidence presented does not show that there is no capacity for working extended shifts or that such shifts are not available in the industry. It was submitted by the CFMEU that the argument is simply that employers would like to have the right to require employees to work extended shifts without paying some allowance for the inconvenience suffered. It was said that such an argument is not available under the award simplification criteria and principles. Further, it was submitted that the case on health and safety grounds against giving employers a wide discretion to force employees in the industry to work 12 hour shifts is overwhelming. [53] We have considered the evidence and material presented. We note that the working of extended shift lengths is not unusual in the coal industry even though the award restriction regarding 8 hour shifts remains. We also note that there are no such restrictions on shift lengths in the the [sic] Metal Industry Award or in the Hospitality Industry - Accommodation, Hotels, Resorts and Gaming Award 1995 (the Hospitality Award) which was under consideration in the Award Simplification Decision. In the coal industry, extended shifts have mainly been introduced by agreement between the employer and the majority of employees concerned, although there are some examples of 12 hour shifts being introduced as a result of arbitration (see the Curragh decision and Re Novacoal Australia Pty Limited and CFMEU [Print N1711, 17 May 1996] (the Vickery decision)). It is clear that extended shifts involving the working of eight and a half and nine hours are more common than those involving twelve hours work, at least in some parts of the coal industry. [54] The question is whether all of the employers to whom the award applies should have the right to require employees to work 12 hour shifts as part of their ordinary hours of work regardless of the consent of the employees and the CFMEU and regardless of the circumstances under which the work is performed. We do not assume that employers would use such a right unfairly. Nevertheless we are conscious that there has been some disputation in the industry concerning 12 hour shifts and of the troubled industrial history at a number of mines on this and other issues. As we have noted, the claim is not limited to a particular site or sites and if granted would have the potential to apply to all mines to which the award applies and to a variety of work environments. The Commission has not had the opportunity of hearing evidence and submissions about the circumstances in which the extended shifts would operate. Furthermore it is clear from the evidence in this case that a number of health and safety issues as well as social issues associated with the working of 12 hour shifts have not been conclusively resolved. In these circumstances a cautious approach is warranted. [55] We consider that the limitations in the award provisions on the working of extended shifts have the effect of restricting or hindering productivity and that the provisions need updating. We also recognise that there are a variety of significant issues relating to the working of 12 hour shifts in the coal industry and that it is appropriate that as far as possible where such extended shifts are necessary that they be introduced as a result of negotiations and by agreement with the employees concerned. In all the circumstances and in seeking to balance the needs of efficiency in the industry and fairness to employees, we have decided that employers in the industry should be able to determine shift lengths to be worked up to ten ordinary hours. Shift lengths greater than ten hours may be implemented at mines by agreement between the employer and the majority of affected employees. Where an employer wishes to introduce shift lengths greater than 10 ordinary hours and agreement cannot be reached, a procedure is to be provided under the award for the matter to be referred to the Commission for determination. The award will be varied accordingly." 23 On 19 June 2000, the Full Bench made an order, varying the Consolidated Award in accordance with its decision of 18 May 2000. Paragraph 3 of the order varied the Consolidated Award: "By deleting the text of sub-clause 24.2 - Length of Shift, and inserting the following: '24.2.1 The employer can determine the shift length to be worked as long as the ordinary time hours do not exceed ten. 24.2.2 Shifts including more than ten ordinary time hours can only be implemented by agreement between the employer and the majority of affected employees. 24.2.3 In the event that the employer wishes to introduce shift lengths greater than ten ordinary hours, and the employer has sought, but not obtained, the agreement of the majority of employees as required by sub-clause 24.2.2, the matter may be referred to the Australian Industrial Relations Commission for determination.'"

The nature of the application 24 On 18 August 2000, the CFMEU applied to the High Court of Australia, seeking prohibition, certiorari and mandamus in respect of the decision of the Full Bench of 18 May 2000 and the order of 19 June 2000, in so far as they deal with hours of work. The grounds in the draft order nisi submitted to the High Court are as follows: "1. The First Respondent failed in its duty to exercise in accordance with law its powers under the [WR Act] in matters C Nos 22644, 24465 and 24466 of 1999. 2. The First Respondent in making the decision in relation to hours of work failed to put the Applicant/Prosecutor on notice that such an outcome was being considered. 3. The First Respondent in making the decision and/or in making the order failed to give the Applicant/Prosecutor an adequate hearing in relation to the way they dealt with hours of work. 4. The First Respondent in making the decision and/or order in relation to hours of work failed to afford the Applicant/Prosecutor natural justice. 5. The First Respondent in considering the appeal against the decision of Commissioner Harrison failed to consider whether the Commissioner had fallen into error in considering under Item 51(8) of Part 2 of Schedule 5 of the [WROLA Act] what steps were appropriate to facilitate the variation of the award in relation to hours of work. 6. The First Respondent failed to have regard to Item 51(8) of Part 2 of Schedule 5 of the [WROLA Act] in reaching its decision on hours of work. 7. Alternatively, if the First Respondent had regard to Item 51(8) of Part 2 of Schedule 5 of the [WROLA Act] in reaching its decision on hours of work, it failed to give reasons for their decision in that respect. 8. The First Respondent in deciding to make an award in the terms set out in their decision based on the terms of certified agreements failed to have regard to Section 95 of the [WR Act]. 9. The decision of the First Respondent on hours of work was a decision that no reasonable tribunal could have reached on the material before it. 10. The First Respondent in making its decision and/or order in proceeding in matter C Nos 22644, 24465 and 24466 of 1999 in relation to hours of work fell into jurisdictional error and/or failed to exercise its jurisdiction. 11. On such other grounds that the Court seem [sic] proper." 25 The High Court of Australia remitted the application to this Court, pursuant to s 44 of the Judiciary Act 1903 (Cth). This Court has jurisdiction in respect of such a remitted matter, pursuant to s 412(2) and (3) of the WR Act. 26 Before this Court, counsel for the CFMEU pressed only two grounds. The first was that the Full Bench failed to exercise its jurisdiction by failing to perform the function required of it by item 51 in Sch 5 to the WROLA Act. The second ground was that the Full Bench denied natural justice to the CFMEU by making its decision as to the form of the new cl 24.2 of the Consolidated Award, without giving notice to the CFMEU that it proposed to make that decision. Written submissions filed on behalf of the CFMEU also raised an argument to the effect that there was an absence of probative evidence to support the conclusion reached by the Full Bench on the issue of shift lengths. On examination, this point appeared to be a variation of the natural justice point, so it is convenient to deal with it as part of that ground.

The requirements of item 51 27 The argument put by counsel for the CFMEU was that item 51 in Sch 5 to the WROLA Act required the Commission to perform a two-stage function. First, pursuant to subitem (6), the Commission was required, if it considered it appropriate, to review an award to determine whether or not it met the criteria specified. Particular attention was focused on criterion (c), the criterion that the award concerned "does not contain provisions that have the effect of restricting or hindering productivity, having regard to fairness to employees." Only if it found that the award failed to meet such a criterion, was the Commission entitled to move to the second stage, under subitem (8), and to take whatever steps it considered appropriate to facilitate the variation of the award so that it did meet the relevant criterion. Counsel for the CFMEU acknowledged that the two stages did not have to occur in separate proceedings and that it was appropriate for the Full Bench to deal with both in the one decision. They contended, however, that the Full Bench failed to deal with the second element of the criterion in item 51(6)(c), which required that it have regard to fairness to employees. Further, it was argued that, when it came to dealing with the criterion, the Full Bench relied on "efficiency", rather than "productivity". Counsel for the CFMEU argued that, whilst productivity is a measure of the efficiency of production, efficiency is a broader concept than productivity. For example, so it was said, efficiency might be said to be achieved by avoiding the need to discuss with employees shift lengths even though such discussions would have no effect on productivity. Finally, counsel for the CFMEU argued that the reasons for decision indicated that the Full Bench did not deal with the matter as a two-stage process, but confused the two. 28 The Full Bench expressed its conclusions in relation to item 51(6) and (8) in par [55] of its reasons for decision, which is quoted above. The argument put by counsel for the CFMEU focused on that paragraph. The argument rests on a misunderstanding of the part that paragraph was intended to play in the Full Bench's reasons. Paragraph [55] was intended to express the Full Bench's conclusions about all that had been said in pars [43] - [54]. An examination of par [55] shows that the first two sentences were intended to express the conclusion of the Full Bench about the application of the criterion in item 51(1)(c). The first sentence dealt with the productivity element. It must be taken to express the conclusion of the Full Bench about the matters summarised in par [51]. The second sentence of par [55] must be taken to express the conclusion of the Full Bench about the matters summarised in pars [52] and [54], especially the last two sentences of the latter. These matters plainly related to the issue of fairness to employees; if they did not, there would have been no occasion for the Full Bench to say anything about them. 29 The remainder of par [55] expresses the Full Bench's conclusion about the performance of its function pursuant to item 51(8). The third sentence indicates not only how the Full Bench has decided to facilitate the variation of the Consolidated Award to meet the criterion in item 51(6)(c), but also why. The choice of the Full Bench to allow employers to choose shift lengths up to ten ordinary hours is based on a balancing of the needs of efficiency against fairness to employees. The next two sentences explain the machinery adopted. The last sentence is a formal statement of the Full Bench's decision on the issue. 30 When par [55] of the Full Bench decision is analysed in this way, it is apparent that the argument on behalf of the CFMEU must fail. Although it dealt with the two stages required by item 51(6) and (8) at the same time, and in the same section of its reasons for decision (as counsel for the CFMEU conceded that it was entitled to do), the Full Bench clearly appreciated that it was performing a two-stage process. In par [55], it expressed its conclusions as to both stages. It did not fail to separate the two stages, but moved from the first to the second. Although it did not mention the phrase "fairness to employees" specifically in the first two sentences, it is implicit that it dealt with that issue. The specific reference to fairness to employees in the third sentence of par [55] (although in the context of the conclusion as to item 51(8)) demonstrates that it cannot be said that the Full Bench ignored fairness to employees. It did not apply a wrong test in the application of the criterion in item 51(6)(c) by speaking, in the third sentence, of "seeking to balance the needs of efficiency in the industry and fairness to employees". That sentence relates to item 51(8). The Full bench did not regard "efficiency" as a synonym for "productivity", although if it had, it is by no means clear that it would have fallen into error, given the context of its reasons. Its use of the word "productivity" in the first sentence of par [55] is particularly telling. 31 For these reasons, the CFMEU has failed to establish that the Full Bench did not perform the statutory function required of it.

Denial of natural justice 32 Counsel for the CFMEU argued that, by choosing a clause allowing shifts of ten ordinary hours, the Full Bench departed from the issues in the case. By not notifying the parties that it proposed to make this departure, and giving them an opportunity to be heard in relation to it, the Full Bench denied the parties (and the CFMEU in particular) natural justice. 33 The argument rested on the proposition that the parties were contesting the merits and demerits of eight-hour shifts as against twelve-hour shifts. Neither side put forward ten-hour shifts as a proposal. In adopting the variation of cl 24.2 of the Consolidated Award that it chose, the Full Bench was making its own proposal, not based on the evidence or the submissions of the parties, and was therefore required to afford an opportunity to be heard on this new proposal. 34 The material filed on behalf of the CFMEU pointed to a considerable amount of evidence, tendered before Commissioner Harrison and considered by the Full Bench on the appeal, focusing on the effects of working twelve-hour shifts. The CFMEU had tendered a statement of Kathryn Joan Heiler, a research fellow at the Australian Centre for Industrial Relations Research and Training at the University of Sydney. The paper advocated the introduction of twelve-hour shifts only by agreement with affected employees. Ms Heiler expanded on the following points: · Research findings on the effects of twelve hours (sic) shifts are equivocal and still in their infancy. · Fatigue and performance. · Safety. · Sleep, physical health and psycho-social well-being, family life. · System implementation, attitudes, preferences and morale. · Overtime and moonlighting. 35 The statement also contained material about community and social impact and material concerning assumptions about family capacity to adjust. Annexed to the statement was an article: Smith L, Folkard S, Tucker P and McDonald I (1998) "Work shift duration: a review comparing eight hour and 12 hour shift systems" 55 Occupational and Environmental Medicine 217. The CFMEU also tendered a report by Coopers & Lybrand Consultants, dated 22 July 1997, entitled "Vickery Mine Shift Length Trials. The effects of shift length on mine productivity. Auditor's report." This report concerns trials at a coal mine of three eight and a half hour shifts per day as against two twelve-hour shifts per day. The CFMEU also tendered a notice from the State Mining Engineer of Western Australia, dated 25 June 1996, addressed to "registered managers". In the notice, the State Mining Engineer said: "It is my view and that of the Inspectorate that the working of 13 twelve hour shifts per fortnight or 6 twelve hour shifts per week for periods ranging from several weeks up to three months, is not conducive to safe systems of work." 36 The employer respondents had tendered to Commissioner Harrison a research paper by Dr Meredith Wallace of Health and Work Behaviour Management Consultants Pty Ltd and the Brain Behaviour Research Institute, La Trobe University. The paper dealt with studies of twelve-hour shifts and referred to the issues of: sleep duration, sleep quality, sleepiness; health complaints (physical wellbeing); psychological symptoms (GHQ); fatigue; social/family life, time for social activities; morning alertness; performance tests - cognitive tasks or reaction time; accidents, injuries, near misses; recovery after night work; vote to continue/satisfaction with work hours; melatonin rhythm; and work/non-work conflict. The report tended to suggest that there were advantages for employees who worked twelve-hour shifts. 37 The employer respondents called evidence from two witnesses engaged in the management of coalmines at Ensham and German Creek respectively, where twelve-hour shifts were already worked by at least some employees. They also relied on the evidence of two industrial relations consultants. 38 All of this evidence was before the Full Bench. The CFMEU and the employer respondents also made written and oral submissions to Commissioner Harrison and to the Full Bench on the issue of the proposed variation to cl 24.2 of the Consolidated Award. The submissions tended to concentrate on the possible effects of twelve-hour shifts. 39 The CFMEU's contention that the Full Bench's choice of shifts of ten ordinary hours was a fundamental change in the nature of the case rests on the proposition that the focus of the evidence was on twelve-hour, as against eight-hour, shifts. It is necessary, however, to determine what was the issue before the Full Bench. It will be recalled that cl 24.2 of the Consolidated Award did not provide that employees could never work shifts greater than eight hours in length. It provided specifically for shift lengths greater than eight ordinary hours, but only by agreement between the employer and the majority of affected employees, and (by implication) only on the basis that hours worked above the eight ordinary hours were to be paid for at a rate higher than that paid in respect of ordinary hours. 40 In the course of the proceeding before the Full Bench, the employer respondents handed up a draft award containing the provisions they sought to have included in the award as a result of the Full Bench's deliberations. This draft award contained a clause relating to length of shifts, designed to replace cl 24.2 of the Consolidated Award. It was in the following terms: "The employer may require employees to work for periods of 12.5 hours in any combination of ordinary and/or rostered overtime hours." 41 The effect of this clause, if the Full Bench had adopted it, would have been to give to the employer concerned the power to determine how many ordinary hours, and how many rostered overtime hours, should be included in a particular shift, which could be for any period up to 12.5 hours. 42 This clause proposed by the employer respondents effectively defined the ambit of the dispute over cl 24.2. The CFMEU adopted the position that it sought to defend cl 24.2 in its existing form. If it had succeeded, any employee who worked more than eight hours in a shift would have been paid at overtime rates for the hours worked beyond eight. The introduction of longer shifts would have been dependent upon agreement between the employer and the majority of employees affected. The employer respondents sought instead to be entitled to control not only the length of shifts worked (up to a maximum of 12.5 hours) but also to determine the number of ordinary hours and the number of rostered overtime hours to be involved in any one shift. 43 The dispute before the Full Bench was therefore not as to the length of shifts. It was as to the power to make decisions to introduce shifts longer than eight hours, and as to the power to determine appropriate rates of pay for the hours worked in such shifts. On these issues, the CFMEU had the opportunity to call any evidence on which it saw fit to rely, and to make any submission that it thought would help its case. If it opted to concentrate on the effect of working twelve-hour shifts, or compulsory twelve-hour shifts, that was its decision. Such a decision was understandable in the circumstances, so that issue could be joined at a level appropriate for specific debate. It could not operate, however, as a unilateral act to confine the issue in dispute to one of either twelve-hour shifts or the status quo. It could not change the fact that, within the ambit of the dispute, it was open to the Full Bench to choose shifts with any number of standard hours between eight and twelve and a half. Likewise, it was open to the employer respondents to put forward whatever they saw fit in relation to the area of dispute. In fact, their case concentrated on twelve-hour shifts as well. There was no denial of natural justice to the CFMEU, in the sense that it lacked notice of the area of dispute or was prevented from making whatever case it wished to make. 44 It must be remembered that the Full Bench was exercising its function as an arbitrator in the absence of agreement by the parties on a provision dealing with shift lengths. It was open to the Full Bench to choose a compromise position, within the area or framework of dispute. For it to do so did not involve any denial of natural justice. 45 Counsel for the CFMEU relied on the judgment of the High Court in Re Australian Railways Union; Ex parte Public Transport Corporation (1993) 117 ALR 17. In that case, the area of the dispute before the Commission was whether an interim award should be made and, if so, whether it should cover certain apprentices whose term of training was about to come to an end. In the course of the proceeding, one member of the Commission raised the question whether the Commission should not make a final award dealing with the apprentices. This suggestion was rejected by all parties. Notwithstanding its rejection, and without providing any further opportunity to deal with the question, the Commission made a final award. The High Court granted a writ of prohibition, restraining the Commission from proceeding any further in relation to the award, on the ground that the employer concerned had been denied natural justice. 46 The Australian Railways Union case is plainly distinguishable from the present. In that case, the rejection by the parties of the Commission's proposal to make a final award made it clear that a final award was outside the area of dispute on which the Commission was exercising its arbitral function. In the present case, the decision of the Commission was to choose a substitute provision for cl 24.2 of the Consolidated Award the terms of which lay well within the area of dispute to which the parties were addressing themselves. 47 In any event, it is by no means clear that the choice made by the Full Bench came as a surprise to the parties. Counsel for the employer respondents drew attention to a number of occasions in the taking of evidence when witnesses had referred to the possibility of shifts of lengths other than eight or twelve hours. Counsel for the employer respondents also drew attention to submissions that made it clear that what was sought was the ability to require the working of shifts of up to twelve ordinary hours. Specific reference was made in the submissions on behalf of the employer respondents to shifts of "something like ten ordinary hours and then two hours of overtime". It is clear that the possibility of a choice of a limit on the number of ordinary hours in a shift somewhere between eight and twelve was reasonably within the range of issues the subject of the contemplation of the parties in the course of the proceeding before the Full Bench. 48 For these reasons, the Full Bench was entitled to choose the form of substitute clause for cl 24.2 of the Consolidated Award which it chose. Its choice did not travel outside the area of dispute between the parties or the evidence that was before it. The CFMEU must therefore fail on this ground as well.

Conclusion 49 For the foregoing reasons, the application must be dismissed. Probably mindful of s 347 of the WR Act, the employer respondents did not seek an order for costs. There should therefore be no order as to costs. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

AND: A FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CONSISTING OF THE HONOURABLE JUSTICE GEOFFREY GIUDICE, PRESIDENT, THE HONOURABLE JUSTICE ALAN BOULTON, SENIOR DEPUTY PRESIDENT AND PETER LAWSON, COMMISSIONER

50 I agree with Gray J. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Counsel for the Applicant: Mr S Crawshaw SC with Mr P Ginters

Solicitor for the Applicant: R L Whyburn & Associates

Counsel for the First Respondent: The first respondent submitted to any order the Court might make

Counsel for the Second to Thirty-Sixth Respondent: Dr C Jessup QC with Mr G Martin SC

Solicitor for the Second to Thirty-Sixth Respondent: Freehills

Date of Hearing: 17 August 2001

Date of Judgment: 21 December 2001