WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES SKILLED RAIL SERVICES PTY LTD

APPELLANT

-and-

Construction, Forestry, Mining and Energy Union of Workers

RESPONDENT

CORAM FULL BENCH

 The Honourable M T Ritter, Acting President

 Senior Commissioner J F Gregor

 Commissioner J H Smith

HEARD MONDAY, 26 JUNE 2006, TUESDAY, 27 JUNE 2006, THURSDAY, 29 JUNE 2006

DELIVERED THURSDAY, 3 AUGUST 2006

FILE NO. FBA 11 OF 2006

CITATION NO. 2006 WAIRC 05199

CatchWords Industrial Law (WA) – Appeal against decision of the Commission – Application for new award – Whether in the public interest to make award – Effect of proclamation of Workplace Relations Amendment (Work Choices) Act 2005 (Cth) – Issues relating to duty of Commission to conciliate under the Industrial Relations Act 1979 (WA) (as amended) – Wage Fixing Principles of the Commission in 2005 – Structural efficiency considerations – Leave entitlements – Appeal allowed – Industrial Relations  Act 1979 (WA) (as amended), s6(b),(c), s6(ca),  s26, s26(1)(a), s26(1)(d)(vi), s27(1)(a)(ii),(iv), s32, s32(1), s32(6), s32A, s32A(1), s36A(1), s49, s51(2) Workplace Relations Act 1996, s3, cl 34(1) Schedule 8, s171(3), s172(2), s178, s208, Workplace Relations Amendment (Work Choices) Act 2005 (Cth), s89(3), s89A(2).

Decision Appeal allowed, order made by the Commission suspended, matter remitted to the Commission for further hearing and determination

Appearances

Appellant  Mr J. Blackburn (of Counsel), by leave

Respondent Mr D. Schapper (of Counsel), by leave

Reasons for Decision

THE FULL BENCH:

The Appeal

1          This is an appeal which was instituted under s49 of the Industrial Relations Act 1979 (WA) (the Act).  It is an appeal against an order made by a single Commissioner on 17 March 2006.  By that order the Commission made an award known as the Iron Ore Production and Processing (Locomotive Drivers Rio Tinto Railway) Award 2006 (the award), in the terms of the schedule to the order and with effect on and from the date of the order.

2          The Commission by the same order also cancelled an interim award it had earlier issued in the same proceedings, named the Iron Ore Production and Processing (Engine Drivers - Skilled Rail Services) Interim Award 2006 (A 5 of 2005).

The Award

3          The Area and Scope clause of the award is in the following terms:-

“3. – AREA AND SCOPE

(1) The award shall apply to all locomotive drivers working on the railroad which forms part of the iron ore production and processing operations carried on in and around Dampier, Pannawonica, Tom Price, Paraburdoo, Marandoo and associated places and who are employed by any firm, company, enterprise or undertaking engaged in the industry of labour hire.”

4          The named parties to the award were set out in clause 14 of the award, as being the present respondent and appellant. 

5          Clauses 6-10 of the award were those clauses which were largely focused upon in the hearing of the appeal.  They are in the following terms:-

“6.  AGGREGATE Wages

(1) The aggregate hourly rate of wage for employees to whom this award applies shall be $40.83 per hour.

(2) A loading of 20% of the hourly rate shall be paid for each hour worked by a casual employee.

(3) The aggregate hourly rate of wage covers all payments for the performance of the work (subject to clause 8 of this award) including penalties, allowances, shift premiums and compensation for all disabilities associated with the nature and location of the work whether the employees are employed on a residential or fly in fly out basis.

(4) Arbitrated Safety Net Adjustments

Increases to salaries, wages and allowances arising from arbitrated safety net adjustments determined by the Commission are to be absorbed into the wages prescribed by this award.

7. - Hours

Employees shall work a 12 hour shift roster averaging 42 hours per week in the case of a 14 day on 14 day off fly in fly out roster and 56 hours per week in the case of a 14 day on 7 day off fly in fly out roster.

8. - Overtime

Any hours outside or in excess of those prescribed in clause 7 - Hours shall be paid at the rate of time and one half for the first 2 hours and double time thereafter.

9. - Annual leave

(1) Five weeks paid annual leave shall be allowed for each year worked. 

(2)  Continuous shift employees shall be allowed a further week as annual leave, in addition to that prescribed in (1).

(3) Pro rata leave shall be paid out on termination.

(4) This clause shall not apply to casual employees.

10. - Long service leave

(1)  13 weeks paid long service leave shall be allowed for each period of 10 completed years of service. 

(2) Pro rata leave shall be paid out on termination where termination occurs after more than 5 years service.”

6          The application for the award was made by the respondent on 9 September 2005.  A notice of answer was filed by the appellant on 30 September 2005.  In the notice of answer, the appellant opposed the application for the award.

7          On 21 December 2005 the Commission heard the issue as to whether an interim award should be made pursuant to s36A of the Act pending the hearing and determination of the claim for final relief.

8          On 23 December 2005 the Commission delivered oral reasons for the decision which it made to grant the interim award.  These reasons were published in written form on 28 December 2005.  The order making the interim award was published on 11 January 2006. 

9          The claim for a final award was heard on 31 January and 1 February 2006.

10       On 7 March 2006 the Commission published its reasons for deciding that a final award should be made.  A minute of proposed order was published on the same date.  The parties were requested to advise in writing if they wished to speak to the minute of the proposed orders.  The appellant indicated it did so and the matter was listed for a hearing to facilitate this.  The issues raised at the speaking to the minutes hearing were dealt with by way of supplementary reasons for decision published on 17 March 2006.  As indicated earlier, on the same date the Commission published the order and award which gives rise to the present appeal.

The Evidence

11       The oral evidence which was before the Commission was described in paragraphs [10]–[21] of the reasons for decision of the Commission published on 7 March 2006, in the following terms:-

“The Evidence

10 Mr Gary Wood is the secretary of the WA Branch of the Mining Division of the applicant.  His union has traditionally had coverage of locomotive drivers in the iron ore industry in the Pilbara of this State.  Despite a significant decline in the presence of the applicant in the Pilbara, in particular at the operations conducted by Robe River Iron Associates (“Robe”) and Hamersley Iron (“Hamersley”), Mr Wood testified that contact has been maintained with drivers at those locations over the years.  Mr Wood's evidence in these proceedings, by way of his witness statement filed as his evidence in chief, was formulated on the basis of information provided to him by locomotive drivers employed by both the respondent and a company by the name of Pilbara Iron, which company now provides rail services to both Robe and Hamersley.  Mr Wood testified that he was not prepared to disclose the identity of those employees from whom he had obtained information for the purposes of these proceedings, because those employees feared retribution in their employment.

11 From his experience and position as secretary of the WA Branch of the Mining Division of the applicant, Mr Wood outlined the rail systems applicable at Hamersley and Robe, being the companies to which the respondent provides locomotive driving services under labour hire arrangements.  According to Mr Wood both rail systems conducted by Hamersley and Robe are now largely integrated.  At annexure 1 to Mr Wood's witness statement was a document outlining the operation of the Hamersley and Robe railway systems and the role played by Pilbara Iron.

12 In his evidence, Mr Wood also sought to highlight the major differences in the rail systems operated by Hamersley and Robe from that operated by BHP Billiton Iron Ore (“BHPB”).  According to his evidence, there are five points of distinction between the two systems.  Firstly, at Hamersley/Robe only head end locomotive power is used, whereas at BHPB locotrol trains are used which operate in the main body of the train configuration.  Secondly, BHPB uses track signals, whereas at Hamersley and Robe in cab signalling is used.  Thirdly, at Hamersley and Robe crews utilise a mid track changeover system, whereas BHPB has traditionally not done so but have moved to this system more recently.  Fourthly, in terms of banking of trains, Hamersley trains are banked out of Yandi, West Angeles and Paraburdoo.  There is presently no banking of trains at BHPB.  Finally, there is some difference in the length of trains with Hamersley and Robe trains being run up to 230 cars in length, as opposed to BHPB trains being up to approximately 320 cars in length.

13 Otherwise Mr Wood testified that the two train systems, they being the Hamersley and Robe on the one hand, and that operated by BHPB on the other, are broadly similar.

14 In terms of the employees of the respondent providing labour hire driving services, there are according to Mr Wood, some 16 employees based at Tom Price and one employee based at Yandi.  All employees are designated as casual employees regardless of their length of employment.  According to Mr Wood, these employees are engaged in all kinds of mainline driving work between the various locations operated by Hamersley and Robe including Yandi, West Angeles, Paraburdoo and Rosella.  The drivers perform the full range of driving duties including driving fully loaded trains, bankers and unloaded trains and additionally are engaged in train loading operations.

15 Mr Wood expressed the view that so far as was within his knowledge and experience, the work performed by employees of the respondent and those employed by Pilbara Iron, over the track on which the respondent's employees worked, is essentially the same.

16 As to rates of pay, Mr Wood testified that the rate of pay for an employee of the respondent as a mainline driver is $39.83 per hour.  He said that this was the lowest rate of pay for any mainline locomotive driver employed on any rail system in the Pilbara.  He also expressed the view from his discussions with drivers, that employees were very dissatisfied with the rate of pay and there existed low morale and high employee turnover.  As to the latter, the respondent in cross-examination took issue with this and there seemed to be some acceptance by Mr Wood that the employee turnover may not have been high as he initially understood.  Further in cross-examination, Mr Wood maintained that he is aware that employees have been continually told that if they pressed ahead with their award application it would prejudice their employment.

17 According to Mr Wood's evidence, the respondent's employees were formerly engaged under common law contracts of employment at least at the time of related proceedings to this matter in application A 3 of 2005, also involving the respondent in provision of labour hire locomotive driving services to BHPB.  He said that recently he has become aware that all employees of the respondent were required to sign AWAs at short notice.  The inference that is sought to be drawn from this evidence is that the employees were encouraged to enter into AWAs because of the commencement of these proceedings.

18 Mr Malpass is the operations manager for the respondent.  His evidence was that the respondent has about 23 employees in its rail operations providing services to the Rio Tinto companies and all are engaged on a fly in fly out basis.  He testified that in the last few months the respondent took a decision to put all employees on AWAs.  As at the time of the proceedings, all but one employee had signed such agreements.  As far as he was aware, there was no dispute amongst employees as to terms and conditions of employment.   He also gave some evidence about turnover in the last 12 months or thereabouts.

19 In relation to the respondent's arrangements with the Rio Tinto companies, whilst Mr Malpass testified he was not familiar with the detail, the rates paid by Rio Tinto to the respondent were based upon the salary paid to the locomotive drivers with an additional mark up.

20 Mr Butler is the locomotive specialist for the respondent and has had many years experience as a train driver.  According to Mr Butler, he has a good working relationship with the respondent's drivers and morale is positive.  In terms of the fly in fly out arrangement, he testified that this was desired by the drivers who preferred fly in fly out to on site residential arrangements.

21 In relation to entry into AWAs, Mr Butler denied that the respondent put any employees under pressure to sign such agreements but conceded that discussions with employees about AWAs took place after the present application was filed by the applicant for an award to cover the respondent's operations.”

12       There were also a number of documents tendered by the parties which were referred to by the Commission in its reasons for decision. 

The Notice of Appeal

13       The notice of appeal contained 15 grounds.  At the hearing of the appeal the Full Bench was informed that grounds 4, 6, 12 and 15 were withdrawn.  Grounds 3 and 7 were amended at the hearing of the appeal.  The remaining live grounds of appeal, including the amended grounds 3 and 7, were as follows:-

“Public interest

1 The Commission erred in failing to find that the making of an award was not in the public interest having regard to the legislative changes which would result from the proclamation of Schedule 1 of the Workplace Relations Amendment (Work Choices) Act 2005 (the Work Choices Act).

PARTICULARS

(1) Skilled submitted that once the Work Choices Act took full effect:

(A) the award would cease to have effect as a state award and this Commission would have no further role in the determination of wages and conditions for the relevant employees or in settling any disputes which may arise;

(B) because all of the employees were on AWAs, the award terms would not be preserved as a notional agreement preserving state awards (NAPSA);

(C) the only NAPSA which might be created would be one incorporating any state laws applying to the AWA employees;

(D) any NAPSA would not be common rule.  No NAPSA would come into operation in the case of new employers; and

(E) even if the state award rates were preserved as an Australian Pay and Classification Scale (APCS), and even that was unclear, they would not apply to existing employees - all of whom were covered by AWAs.

(2) Further, the making of a new award, particularly the award sought, would be directly contrary to the scheme and objects of the Work Choices Act which are concerned to:

(A) reduce the number of awards and remove state and regional differences; and

(B) ensure that awards contain minimum conditions of employment which do not act as a disincentive to bargaining at the workplace level.

2. The Commission in determining whether it would not be in the public interest to make an award gave insufficient weight to the cumulative effect of the impact of the Work Choices Act and:

(a) the fact that Skilled’s employees were all covered by AWAs so that there were no employees to whom the award would apply;

(b) the fact that Pilbara Iron’s locomotive drivers and other employees and employees of other contractors to Pilbara Iron were regulated by federal instruments; and

(c) the absence of any industrial disputation, demonstrated employee dissatisfaction or prior union activity in connection with the work sought to be covered by the award.

Conciliation

3 The Commission acted contrary to s 32 of the Act by proceeding to arbitrate the merits of the claim without being satisfied or in circumstances where it could not properly have been satisfied that the resolution of the matter would not be assisted by conciliation.

PARTICULARS

(1) Skilled informed the Commission that it considered and wished to argue that the making of an award was not in the public interest but that if the Commission rejected that argument and determined an award should be made, Skilled would wish to conciliate.

(2) In the circumstances there was no basis on which the Commission could properly have formed the view that conciliation would not have assisted the resolution of the matter.

(3) In proceeding to hear and determine the public interest and merit arguments at the same time the Commission deprived Skilled of the opportunity to conciliate in the event that the Commission rejected its public interest arguments.

Decision to make actual rates award

5. The Commission erred in making an actual rates award:

(a) by acting contrary to the Wage Fixing Principles:

(i) which required the Commission to make a safety net award; and

(ii) which required the Commission to apply Structural Efficiency Considerations which included the Minimum Rates Adjustment Principle;

(b) by failing to have regard to the need to encourage employers and employees to reach enterprise appropriate agreements and effectively removing the incentive and ground for such agreements;

(c) when there was no evidence or submissions to justify the making of an actual rates award (even if such an award could be made under Principle 11 without infringing the Wage Fixing Principles); and

(d) by failing to provide any or adequate reasons for its decision to make an actual rates award.

7. By awarding a rate of $1862 for a 38 hour week ($40.83 x 120% x 38 hours) the Commission:-

(a) failed in its obligation to determine an appropriate minimum rate;

(b) failed in its obligation to make a “safety net” award; and

(c) failed to have regard to the need to encourage employers and employees to reach enterprise appropriate agreements and effectively removed the incentive and ground for such agreements.

8. The Commission erred in failing to have regard or proper regard to the evidence of minimum rates (including minimum rates fixed in accordance with the MRA process) paid to locomotive drivers under other awards on the basis that the Commission was here considering rates and conditions to apply in the Pilbara when:

(a) the Commission’s obligation was to apply the Wage Fixing Principles including the Minimum Rates Adjustment Principle;

(b) the Commission’s obligation was to identify an appropriate minimum rates of pay; and

(c) any disabilities associated with the location of the work could be accommodated by the inclusion of the Commission’s standard location allowance as it is in other common rule awards which apply throughout the State.

Decision to use BHP rates as a guide

9. The Commission erred in using the BHP Award rates as a guide when:

(a) the rates in the BHPB Award were not properly fixed minimum rates and the Commission in the making of a First Award was required to apply Structural Efficiency Considerations which included the Minimum Rates Adjustment Principle;

(b) the BHPB Award was the product of the almost unique circumstances of that case including the enterprise nature of that award, the nature of the history of industrial regulation at BHPB over many decades and BHPB’s refusal to bargain collectively and could not simply be transposed to a common rule first award applying to labour hire employers in different factual circumstances;

(c) in using the BHPB Level 4 aggregate rate “as a guide” and then discounting that rate by 10% to arrive at the rate for the subject award, the Commission acted without evidence in that there was no evidence before the Commission to indicate the composition of the BHPB aggregate rates, how those rates had been arrived at or the particular penalties, allowances and disabilities for which they represented compensation.  The absence of such evidence meant that the Commission could not properly be satisfied as to the relevance of those rates to the work to be covered by the award and was in no position to derive a rate for the subject award from the BHPB rates;

10. In awarding a rate which was only 10% less than the BHPB Level 4 aggregate rate, the discount being said to reflect the factors identified in the decision, the Commission failed to make any allowance or adequate allowance for the differences in shift rosters between the BHPB employees and the Skilled employees.

PARTICULARS

(1) The BHPB rate is an aggregate rate intended to compensate BHPB employees for, among other things, the inconveniences and disabilities of their particular shift roster.

(2) While there was no evidence before the Commission as to the particular composition of the BHPB aggregate rate, it is clear that the rate incorporates, among other things, overtime, shift, weekend and public holiday components appropriate to the 8 shifts on/6 shifts off 48 hours per week roster worked by the BHPB employees;

(3) Skilled employees who work a 14 shifts on/14 shifts off 42 hours per week roster work substantially less overtime and fewer shifts, weekends and public holidays;

(4) The Commission discounted the BHPB rate by 10% to allow for the factors he identified in his decision.  They were the absence of a direct “like with like” comparison with BHPB, the circumstances of FIFO compared to residential work and inherent differences in the operations between Rio Tinto and BPHB rail operations;

(5) The Commission made no allowance, alternatively no adequate allowance, for the differences in shift rosters as between the BHPB employees and the Skilled employees;

(6) By awarding the BHPB rate (discounted only for those matters referred to in his decision) the Commission awarded an aggregate rate premised on an 8 shifts on/6  shifts off 48 hour week roster (and incorporating overtime, shift weekend and public holiday payments appropriate to that roster) to employees who, with one exception, worked 42 hours a week.

(7) Even if it could be said that the BHPB rate was an appropriate guide, which it was not, had the Commission properly taken account of the difference in shift rosters, it would have been necessary to further discount the rate awarded by an approximate 11%.  That is, had the Commission had regard to the differences in overtime and penalties as between the BHPB 48 hour roster and the Skilled 42 hour roster, it would have found those differences of themselves warranted an approximate 11% discount to the BHPB rate before any allowance was made for the factors identified in the Commission’s decision.

Single rate of pay

11. In awarding a single rate of pay to apply to all employees covered by the award the Commission erred in:

(a) failing to distinguish between work performed on the mainline and other work including the work performed by banker drivers (the rate awarded being based on the BHPB Level 4 rate for mainline drivers);

(b) awarding the same aggregate rate (which rate was intended to include compensation for all penalties and shift premiums) to employees who worked a 14 day on 14 day off 42 hour roster as to employees who worked a 14 day on 7 day off 56 hour roster;

(c) failing to provide reasons or adequate reasons for (a) or (b).

Long Service Leave

13. The Commission erred in awarding 13 weeks’ long service leave after 10 years on the basis of the Rio Tinto industrial instruments when the Commission had earlier deprecated comparisons based on those ‘consent’ instruments and when the Long Service Leave General Order represents the standard for private sector employees and there was no evidence, alternatively no sufficient evidence, to warrant a departure from that standard.

Annual leave

14. The Commission erred in awarding 5 weeks’ annual leave and an additional week for shift workers, on the basis of little or no evidence, when the award made was to apply to labour hire employers and the standard of this Commission is 4 weeks and an additional week for shift workers.”

14       Due to the way in which some of the grounds of appeal were to be argued, it was necessary for notices to be issued to the Attorneys General of the Commonwealth, States and Territories pursuant to s78B of the Judiciary Act 1903 (Cth).  None of the Attorneys General indicated they wished to intervene in the appeal.

Public Interest – Grounds 1 and 2 of the Appeal

15       It is not disputed by the appellant that pursuant to s36A(1) of the Act, the onus lay on it to show that it would not be in the public interest to make the award.  However, the appellant complains that the Commission at first instance erred in failing to find that the making of the award was not in the public interest having regard to the legislative changes which would result from the proclamation of Schedule 1 of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (the Work Choices Act).  Further the appellant says that the Commission should have exercised its discretion under s27(1)(a)(ii) and (iv) of the Act to dismiss the application for an award.

16       At the time the application for a final award was heard by the Commission on 31 January 2006 and 1 February 2006, the Work Choices Act had been enacted but not proclaimed.  The Federal Government had, however, announced that it intended to proclaim the Work Choices Act in March 2006 (Exhibit R1).  It was accepted by the Commission at first instance that the pending legislation was a relevant consideration as to whether he should exercise his discretion to make an award.  (See, for example, paragraphs [38] and [39] of the reasons for decision).

17       The appellant argues the Commission gave insufficient weight to the effect of the Work Choices Act when it was not in dispute that:-

(a) The appellant was a constitutional corporation;

(b) At the time of hearing the appellant was the only employer within the scope of the proposed award;

(c) The appellant had a policy of employing its locomotive drivers on Australian Workplace Agreements (AWAs); or

(d) By the time of the hearing on 30 January 2006 and 1 February 2006 all of the appellant’s relevant employees were engaged under AWAs.

18       The appellant submitted to the Commission that, in those circumstances, once Schedule 1 of the Work Choices Act was proclaimed:-

(a) Any award that was made in the proceedings would cease to have effect as a state award and the Commission would have no further role in the determination of wages and conditions for the relevant employees or in settling any disputes which may arise;

(b) Because all of the employees were on AWAs, the award terms would not be preserved as a notional agreement preserving state awards (NAPSA) – they would simply cease to have effect;

(c) The only NAPSA which might be created would be one incorporating any state laws applying to the AWA employees;

(d) Any NAPSA would not be common rule.  No NAPSA would come into operation in the case of new employees; and

(e) Even if the State award rate was preserved as an Australian Pay and Classification Scale (APCS), and even that was unclear, they would not apply to existing employees – all of whom were covered by AWAs.

19       The gist of the appellant’s submissions was that, because all of the employees were on AWAs, none of the terms of the proposed award would have a continued life in any format.  However, the appellant concedes that the wage rate in the award could apply to new employees after the proclamation of the Work Choices Act as the award rate would be preserved as an APCS for new employees.  (See clause 34(1), Schedule 8 of the Workplace Relations Act 1996 (the WR Act)).  However, the appellant says the other provisions of the award would not translate to the Federal jurisdiction in any form.

20       The appellant says the Commission must be taken to have decided the public interest issue on the basis that the appellant’s analysis of the effect of the Work Choices Act was correct but that this effect was not a sufficient reason to find that the making of the award would not be in the public interest.  (See paragraphs [38] and [39] of the reasons for decision delivered on 7 March 2006).

21       The appellant says the Commission failed to consider the submission that the making of a new award, particularly the award sought, would be directly contrary to the scheme and objects of the Work Choices Act which was concerned to:-

(a) reduce the number of awards and remove state and regional differences; and

(b) ensure that awards contain minimum conditions of employment which do not act as a disincentive to bargaining at the workplace level.

22       Further, the appellant contends that, in weighing the public interest the Commission ought to have had regard to the scheme and objects of the Work Choices Act and to the fact that the Work Choices Act would shortly exclude the operation of the Act, for all practical purposes, so far as the application was concerned.

23       In addition, the appellant says that for all practical purposes, the Commission was not engaged in making an award, but in setting a wage rate for employees of a constitutional corporation in circumstances where the Work Choices Act provided for that function to be performed by the Australian Fair Pay Commission.  Viewed in that light, and having regard to the scheme and objects of the Work Choices Act, the making of an award that would last only a few weeks, and apply to no-one in that time, was contrary to the public interest.

24       In relation to ground 2 the appellant says even without the Work Choices Act, the appellant’s employees, Pilbara Iron’s own employees (including its 140 locomotive drivers) and employees of other contractors to the Pilbara Iron companies were already regulated by Federal instruments as a Full Bench of the Australian Industrial Relations Commission (the AIRC) had previously found it was in the public interest that employees of those companies who worked side by side be subject to a single source of industrial regulation.  (See AWU v Hamersley Iron Pty Ltd (2004) 133 IR 417 at [58] and [129]).  Consequently, the appellant submitted that it would be contrary to the public interest to make an award for other reasons including that there was no credible evidence:-

(a) of any industrial disputation;

(b) of the union previously representing the interests of employees sought to be covered by the award;

(c) of employees being dissatisfied with their terms and conditions; or

(d) that employees had requested the union to pursue an award.

25       On the contrary the appellant says the evidence of Mr Malpass and Mr Butler was that:-

(a) the appellant’s employees had not indicated any dissatisfaction with their terms and conditions;

(b) the appellant had no difficulty finding employees to work for it at Pilbara Iron;

(c) morale was high;

(d) turnover was very low; and

(e) the respondent had not, other than by bringing these proceedings, previously sought to represent the interests of the appellant’s employees.

26       The appellant argues that as the Commission dealt with several of the points raised in relation to the appellant’s public interest argument, in turn and in disposing of each point before moving to the next point the Commission failed to consider the case as a whole.  In particular, the appellant says by weighing each factor in isolation the Commission failed to consider whether the cumulative weight of the factors raised by the appellant was such that it was not in the public interest to make the award.  Had the Commission weighed the case brought by the appellant as a whole, the appellant says the Commission ought to have found that it was not in the public interest to make a new award.

27       The respondent says that grounds 1 and 2 do not raise proper grounds of appeal.  In particular that no error has been demonstrated within the principles enunciated in House v The King (1936) 55 CLR 499.  Alternatively the respondent says the Commission did not give insufficient weight to the effect of the Work Choices Act and contends the award has effect in a number of different ways.  Firstly, the respondent points out that the award is a common rule award of hybrid nature.  It applies to one place of work (a railroad) and applies to any employer who is engaged in the industry of labour hire who employs locomotive drivers on that railroad.  The respondent says the whole of the submissions in relation to the Work Choices Act proceeds on the assumption that only the appellant or corporations will be in the business of providing labour to which the award will apply.  The respondent points out that there is no basis for such an assumption and it cannot be assumed that the industry described in the award will only be carried on in the future by corporations.  Secondly, the respondent says that the appellant’s submission overlooks the fact that if an AWA of a locomotive driver employed by the appellant is cancelled the terms of the award would apply pre-proclamation of the Work Choices Act, in its terms, or as a NAPSA post-proclamation.  In addition, pre-proclamation of the Work Choices Act, the award would apply to new employees who entered into a workplace agreement for the purposes of the no disadvantage test and post the Work Choices Act the wage rate has effect as a floor for the negotiation of future AWAs as an APCS.  Thirdly, the respondent says that the appellant’s submissions overlook the prima facie requirement of s36A of the Act that an award be made.  It is the Commission’s duty to give effect to the provisions and scheme of the Act not the Work Choices Act.  The public interest could never require the Commission to give effect to a Federal statutory scheme over the Act by which the Commission is constituted.

28       We do not agree with the respondent’s submission that grounds 1 and 2 of the appeal do not raise valid grounds of appeal.  In Gronow v Gronow (1979) 144 CLR 513 at 519-520 Stephen J with whom Mason and Wilson JJ agreed at 525-526 observed:-

“The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion.  While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion.  When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge.  Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessment of matters of weight.”

(Aitken J at 537-538 made similar observations).

29       The appellant in this matter, contends that the Full Bench is in the same position as the Commission at first instance to make an assessment as to the weight to be attached to the matters raised, as the material findings of fact and law are not matters which rely upon the assessment of the credibility of any witness.  While that may be so we do not find it necessary to determine this issue as we are not persuaded that the Commission erred in concluding that the appellant had not discharged its onus to persuade the Commission that in the public interest an award should not be made.

30       In relation to ground 1 we are not persuaded that the award will have no effect on the terms and conditions of employment of existing and future employees of the appellant post the Work Choices Act.  Section 171(3) of the WR Act (s89(3) of the Work Choices Act) provides that Divisions 2 to 6 of Part 7 of the WR Act constitute the Australian Fair Pay and Conditions Standard (AFPCS).  Section 172(2) of the WR Act (s89A(2) o the Work Choices Act) provides the AFPCS prevails over an AWA or a contract of employment that operates in relation to an employee to the extent the AFPCS is more favourable.  By operation of s178 of the WR Act the award will be regarded as a pre-reform State Wage instrument and a pre-reform non-federal wage instrument which in turn is a pre-reform wage instrument.  Pursuant to s208 of the WR Act (which is contained in Subdivision I of Division 2 of Part 7) the award is taken to be a preserved APCS and the preserved APCS is derived from the award as a pre-reform wage instrument.  Consequently, until a new rate of pay is set by the Australian Fair Pay Commission which applies to employees whose conditions of employment are regulated by the provisions of the WR Act the award rate has effect as statutory minima.  In addition we accept the respondent’s submission that the award may have effect on its entire terms in the future if a labour hire agency that is not a constitutional corporation chooses to supply locomotive drivers in the industry to which the award applies.  Further, we are not satisfied that the making of the award or the award sought by the respondent is contrary to the scheme and objects of the Work Choices Act.  There is nothing in s3 of the WR Act, which sets out its principal objects, to support this contention.  Also, the provisions of the WR Act that provide for the continuing effect of State awards as APCS’s or NAPSA’s do not support the contention.

31       In relation to ground 2 we do not accept the contention that Commission did not give sufficient weight to the cumulative effect of the impact of the Work Choices Act and the other matters relied upon by the appellant.  Just because the Commission considered each matter raised in separate paragraphs does not lead to the conclusion that it was in error or that it gave insufficient weight to the matters raised or that he did not consider the matters raised as a whole.  (See paragraphs [44] and [46] of the reasons for decision delivered on 7 March 2006).  Further it is apparent from its reasons at paragraphs [40] to [46] that the Commission:-

(a) rejected the appellant’s contention that there were no employees to whom the award could apply;

(b) concluded that although Pilbara Iron’s locomotive drivers and employees and other employees of other contractors to Pilbara Iron were regulated by Federal instruments he was able to take into account that post the Work Choices Act the AIRC would be unable to resolve the dispute; and

(c) found industrial disputation was not a necessary requirement for the exercise of the Commission’s jurisdiction.

32       For these reasons we find that grounds 1 and 2 are not made out.

Ground 3 – Duty to Conciliate

33       The appellant contends the Commission at first instance acted contrary to s32 of the Act by proceeding to arbitrate the merits of the claim without being satisfied (or in the circumstances where it could not have been satisfied) that the resolution of the matter would not be assisted by conciliation.  The appellant says that the consequence of the Commission proceeding to arbitrate when it was not entitled to do so was that it exceeded jurisdiction with the result that the decision must be regarded as void.  In relation to this point we understand the submission made on behalf of the appellant by Mr Blackburn is that it is a pre-condition to a valid arbitration that the Commission either conciliate or be satisfied that the resolution of the matter would not be assisted by conciliation.  In particular, the appellant argues s32(1) of the Act should be construed in the nature of a statutory bar whereby the failure to comply bars the remedy if the issue is pleaded or raised.  (See The Commonwealth v Mewett (1997) 191 CLR 471 at 534-535 per Gummow and Kirby JJ; considered by Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ in Berowra Holdings Pty Ltd v Gordon [2006] HCA 32 at [20]). 

34       The appellant informed the Commission at first instance prior to the Commission making a decision to expedite proceedings that whereas it opposed the making of an award on public interest grounds, that in the event that its public interest argument was rejected, it wished to enter into conciliation, including Commission assisted conciliation, as to the terms of any award (Transcript, page 29, 7 December 2005).  The appellant also sought to have its public interest argument dealt with as a preliminary issue prior to any hearing as to the merits.

35       On 9 December 2005, the Commission delivered reasons for a decision in which it determined that it would provide some expedition to the proceedings.  The Commission programmed the hearing for an interim award on 20 December 2005 and listed the hearing for a substantive award in mid January 2006. (These dates were later changed.)  The Commission` determined that the public interest issue should not be separated from a hearing as to the merits of the making of a final award.  At paragraph [17] of its reasons for decision given on 9 December 2005, the Commission said:-

“I am not disposed to separating the issue of the public interest from the ‘merits’ as such.  It seems to me that there may well be some overlap in any event between these issues.  As to conciliation pursuant to [sic] 32 of the Act, the respondent’s notice of answer opposes the making of any award in its entirety, regardless of any public interest issues arising.  Given the stated positions of the parties, I am not persuaded that conciliation at this stage of the matter would be availing.  However, if the position of the parties changes then of course, given the terms of s 32A of the Act, the Commission can conciliate at any stage of the matter before it.”

36       The appellant argues that the Commission misdirected itself as to the facts and/or failed to have regard to a relevant consideration in that the appellant had informed the Commission of its preparedness to conciliate if the public interest and merits issues were separated and the public interest issue determined against it.  The Commission nonetheless decided to hear and determine the public interest and merit arguments together and decided conciliation would not be availing.  It is argued the Commission’s reference to the “to the stated position of the parties” clearly misrepresented the appellant’s position.  In particular, the appellant submits the Commission was not justified in relying upon the appellant’s notice of answer and counter-proposal as indicating that the appellant was opposed to the making of any award in its entirety, and therefore opposed to conciliation.

37       The appellant also submits there was no basis on which the Commission could properly have been satisfied that conciliation would not have assisted the resolution of the matter and the appellant was denied the opportunity to conciliate. 

38       The appellant also argues the Commission applied the wrong test under s32(1) of the Act in deciding that it would proceed to arbitration.  The full text of s32 of the Act is set out below.  The appellant argued that the Commission must endeavour to resolve an industrial matter by conciliation unless satisfied “that the resolution of the matter would not be assisted by so doing”.  It is argued that this is a different test from that applied by the Commission.  The test applied by the Commission was cast in positive terms rather that the negative terms of the section, it was argued.  The submission was that the section refers to conciliation not assisting  wheras the Commission applied a test of conciliation “being availing”. In support of the submission the appellant relied upon the observations made by Brinsden J in RRIA v AMWU (1986) 66 WAIG 1553 at 1558 (Kennedy and Olney JJ agreeing)

39       The respondent argues that at all material times the appellant did not wish to conciliate.  It says when the application was filed for a new award all of the appellant’s employees terms and conditions of employment were covered by common law contracts and the appellant’s response to the application was to offer the employees AWAs.  The respondent also contends that even if it be the case the appellant wanted to conciliate later (if its public interest argument was not accepted) it was still the case that at the time the Commission decided to matter, it had not conciliated.  Further, it says that by this ground the appellant is in truth attacking the refusal of the Commission to split the issues and decide public interest issue first.  The respondent also submits that, in effect, no incorrect test was applied by the Commission in deciding to proceed to arbitration.

40       Our reasoning on this ground is as follows.  In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 McHugh, Gummow, Kirby and Hayne JJ affirmed the well known principles that the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute and the meaning of the provision must be determined by reference to the language of the instrument viewed as a whole.

41       Section 32 of the Act provides:-

“(1) Where an industrial matter has been referred to the Commission the Commission shall, unless it is satisfied that the resolution of the matter would not be assisted by so doing, endeavour to resolve the matter by conciliation.

(2) In endeavouring to resolve an industrial matter by conciliation the Commission shall do all such things as appear to it to be right and proper to assist the parties to reach an agreement on terms for the resolution of the matter.

(3) Without limiting the generality of subsection (2) the Commission may, for the purposes of that subsection — 

(a) arrange conferences of the parties or their representatives presided over by the Commission;

(b) arrange for the parties or their representatives to confer among themselves at a conference at which the Commission is not present.

(4) The Commission shall — 

(a) if it gives or makes a direction, order or declaration orally under subsection (3), reduce the direction, order or declaration to writing as soon as is practicable thereafter;

(b) preface each direction, order or declaration given or made by it under subsection (3) — 

(i) if so given or made in writing, at the time of that giving or making; or

(ii) if so given or made orally, at the time of the reduction of that direction, order or declaration to writing,

with a preamble in writing setting out the circumstances which led to the giving or making of that direction, order or declaration; and

(c) make the text of each direction, order or declaration given or made by it under subsection (3) and of the preamble thereto available to the parties as soon as is practicable after that giving or making.

[(5) repealed]

(6) Where the Commission does not endeavour to resolve a matter by conciliation or, having endeavoured to do so — 

(a) is satisfied that further resort to conciliation would be unavailing; or

(b) is requested by all the parties to the proceedings to decide the matter by arbitration,

the Commission may decide the matter by arbitration.

(7) Where a matter is decided by arbitration the Commission shall endeavour to ensure that the matter is resolved on terms that could reasonably have been agreed between the parties in the first instance or by conciliation.

(8) For the purposes of this section the Commission may —

(a) give such directions and make such orders as will in the opinion of the Commission — 

(i) prevent the deterioration of industrial relations in respect of the matter until conciliation or arbitration has resolved the matter;

(ii) enable conciliation or arbitration to resolve the matter; or

(iii) encourage the parties to exchange or divulge attitudes or information which in the opinion of the Commission would assist in the resolution of the matter;

(b) give any direction or make any order or declaration which the Commission is otherwise authorised to give or make under this Act.”

42       Section 32A of the Act provides:-

“(1) The functions of the Commission under this Act as to the resolution of matters by conciliation (“conciliation functions”) and the determination of matters by arbitration (“arbitration functions”) —

(a) are to and may be performed at any time and from time to time as and when their performance is necessary or expedient; and

(b) are not limited by any other provision of this Act.

(2) Without limiting subsection (1), nothing in this Act prevents the performance of conciliation functions merely because arbitration functions are being or have been performed.”

43       Section 6 of the Act provides in part:-

“The principal object of this Act are -…

(b) to encourage, and provide means for, conciliation with a view to amicable agreement, thereby preventing and settling industrial disputes;

(c) to provide means for preventing and settling industrial disputes not resolved by amicable agreement, including threatened, impending and probable industrial disputes, with the maximum of expedition and the minimum of legal form and technicality,…”

44       In our opinion a failure of the Commission to conduct itself strictly in accordance with s32(1) of the Act does not, at least in all cases, lead to the conclusion that an arbitrated award is “void”, as argued by the appellant.  Section 32(1) of the Act requires that the Commission consider whether resolution of an industrial matter would not be assisted by conciliation.  The section does not require that conciliation is always a precondition to arbitration.  This is made plain by both s32(6) and s32A(1) of the Act.  The contents of s32A(1) of the Act in providing that the arbitration function of the Commission may be performed when expedient and is not limited by any other section of the Act has the effect, in our opinion that a failure to strictly comply with the contents of s32(1) of the Act will not lead to an arbitration award being “void” in all cases.  In our view the award was not “void” as argued by the appellant in this case.  These opinions are consistent with the objects contained in ss6(b) and 6(c) of the Act, quoted above.

45       The Commission clearly considered whether the resolution of the matter would have been assisted by conciliation.  In considering this issue it was entitled to take into account the contents of the appellant’s notice of answer in which the appellant made an unequivocal statement that it opposed the application for an award and did not put forth any counter-proposal. 

46       The only basis on which the appellant was prepared to conciliate was if its public interest argument was heard as a preliminary issue and a ruling was made rejecting the appellant’s argument that the application for an award be dismissed in the public interest.  (See Transcript pages 29 and 30 of proceedings on 7 December 2005).  In the reasons for decision published on 9 December 2005 the Commission in effect rejected the appellant’s conditional offer to conciliate as it determined that the public interest issues should not be separated from a hearing on the merits.  Further the Commission explicitly left open the prospect of conciliation if the parties were to change their positions.  It is conceded by the appellant that, after the Commission’s reasons for decision were published on 9 December 2005 and prior to the arbitration as to the merits and public interest commencing on 31 January 2006, no steps were taken by the appellant to request the Commission to conciliate when such course of action was open to them under s32A of the Act and the Commission had in its reasons for decision issued an invitation to do so.  Consequently we are not satisfied that the appellant was denied an opportunity to conciliate. 

47       As to the appellant’s submission that the Commission applied the wrong test in considering conciliation under s32A(1) of the Act, we are not satisfied that, even if the Commission did so, it was of any consequence in this matter.  The appellant’s position was in effect that unless the public interest argument was determined separately and first (and adversely to it), it was not prepared to conciliate.  The Commission decided it would not determine the public interest argument first.  Accordingly the position of the appellant was that it has not prepared to conciliate.  In the circumstances of this case then the Commission could not have been other than satisfied that “the resolution of the matter would not be assisted” by conciliation.  In making this point we recognize that whether the Commission will conciliate does not turn, under s32(1) of the Act, on whether a party “believes honestly” that the dispute could not be resolved by conciliation.  (See RRIA v AMWU at 1559).  This case involved however something qualitatively different, being as stated, in effect a constructive refusal to conciliate.

48       We are not satisfied that ground 3 is made out.

The Wage Principles/Appeal Grounds 5, 7 & 8

49       We deal with these grounds collectively.

50       To consider these grounds of appeal it is necessary to say something about principle 11 of the Commission’s 2005 Wage Fixing Principles and the reasons for decision of the Commission in assessing the appropriate rates of pay for those people who would be covered by the award.

51       The Wage Fixing Principles of the Commission in 2005 were Schedule 2 to the General Order made by the Commission in Court Session on 4 July 2005.  (See (2005) 85 WAIG 2101).  The parties agreed that as the present application was an application for a new award, principle 11 of the Wage Fixing Principles applied.  This is in the following terms:-

“11. New Awards (including interim Awards) and Extensions to an existing Award

The following shall apply to the making of a new award (including an interim award) and an extension to an existing award:

(a) In the making of a new award, the main consideration shall be that the award meets the needs of the particular industry or enterprise while ensuring that employees’ interests are also properly taken into account.  Structural efficiency considerations shall apply in the making of such an award.

(b) Subject to section 36A(3) in the making of an interim award the Commission shall ensure that the award meets the needs of the particular industry or enterprise while ensuring that employees’ interests are also properly taken into account.  Structural efficiency considerations shall apply in the making of such an award.

(c) A new award (including and interim award) shall have a clause providing for the minimum award wage [see Clause 9 of this Section] included in its terms.

(d) In the extension of an existing award to new work or to award-free work the rates applicable to such work will be assessed by reference to the value of work already covered by the award, providing structural efficiency considerations including the minimum rates adjustment provisions where relevant have been applied to the award.”

52       The General Order including the Wage Fixing Principles was made pursuant to the then s51(2) of the Act.  The effect of the making of such a General Order upon the arbitral powers of the Commission was discussed by Nicholson J in RRIA v AMWU and Others (1993) 73 WAIG 1993 at 1999 in the following terms:-

“Where a General Order is made pursuant to [subsection 51(2) of the Act] it is made for the purpose of “giving effect to that National Wage Decision”.  The words “giving effect to” seem to me to indicate a legislative intention that the General Order is to be applied; that is, that it is to be given effect to.  The making of a General Order therefore requires more than that the Commission act consistently with the Principles; it requires that the Commission apply those principles.  …

The position is, therefore, that the application before the Commissioner was only to be resolved by reference to the Principles.”

53       Accordingly in determining the terms of the award the Commission was obliged to apply the Wage Fixing Principles, to the extent that a failure to do so would constitute error.  

54       In its reasons for decision published on 7 March 2006 the Commission reviewed the arguments of the parties about the awards which were appropriate to base the terms and conditions of employment of the employees which would be covered by the award.  This included a discussion of whether the Rio Tinto Iron Ore Award 2004 (the Rio Tinto Award) was an appropriate industrial instrument for the Commission to have regard to in determining its rates of pay.  Submissions were also made about the appropriateness of use of the Iron Ore Production and Processing (BHP Billiton Iron Ore Pty Ltd) Award 2002 (the BHP Award).

55       At paragraph [56] of its reasons the Commission decided that the Rio Tinto Award was properly to be characterized as a consent award.  In the following paragraph the Commission said that it was “settled that in arbitration proceedings, a party cannot rely upon consent arrangements as it may do in relation to any outcome which has been arbitrated by an industrial tribunal.  That is not to say however that the terms of the Rio Award are not a relevant consideration in the Commission’s determination of this matter”.  At paragraph [58] the Commission said that it would therefore be cautious in its consideration of the terms of the Rio Tinto Award in these proceedings.

56       At paragraph [59] the Commission said that the central issue for determination was the rate of pay to be contained in the award.  The Commission referred to the present respondent’s submission that it should have regard to the aggregate salaries paid under the BHP Award for locomotive drivers, in particular the Level 4 driver, as the appropriate bench mark.  The Commission also referred to the present appellant’s submission that when one compared the fly in fly out rates under the Rio Tinto Award and the Robe River Certified Agreement the rates presently paid by the respondent were competitive.  (These rates were $39.83 per hour).  The submissions of the parties were further reviewed by the Commission in the paragraphs that followed in the reasons.

57       At paragraph [66] of its reasons the Commission commented as follows:-

“Significant also, when considering the argument of the respondent based upon reliance on the Rio Award, is the fact that the Rio Award, according to the history of its making, was intended to operate as a minimum safety net award.  What the Commission has before it in this case however, is a claim for in effect, an award rate to reflect an actual paid rate, as is the case at BHPB.  In concert with this observation, is the obvious proposition that the respondent's present rates of pay under the AWAs recently entered into, are actual paid rates which rates are based upon an award intended to be a minimum safety net award.  Therefore the comparisons made by both the applicant and the respondent need to be considered by the Commission in light of these observations.”

58       At paragraph [68] of its reasons the Commission made a finding that he was not satisfied the appellant’s “present “all up” hourly rate of pay for mainline fly in fly out drivers, reflecting as it does an actual rate of pay, in the context of other rates of pay for such work in the Pilbara in this State, is an adequate and fair rate of wage or salary for the purposes of ss 6(ca) and 26(1)(d)(vi) of the Act.”  The Commission then also referred to what it said were its requirements under the Act to ensure that “any determination that it makes is consistent with facilitating the efficient organisation and performance of work in accordance with the respondent’s enterprise, as is also required by s 26(1)(d)(vi) of the Act.”

59       The Commission then turned to consider what the appropriate and fair rate of pay was for the award.  The Commission’s reasons on this issue were expressed in paragraphs [69]-[71] of its reasons for decision as follows:-

“69 What then is an appropriate and fair rate of pay for present purposes?  I do not consider that a direct translation must be made between the rates payable by BHPB for a Level 4 locomotive driver, to establish the rate for employees of the respondent.  The BHPB rates are certainly a relevant consideration in the exercise of the Commission’s discretion.  However, the Commission as presently constituted is well aware of the circumstances leading to the making of the BHPB Award, in relation to which there is a significant history.  That history is a matter of record and is set out in detail in the various decisions of the Commission in Court Session and I need not repeat it for present purposes.  Furthermore, whilst there may be some similarities between the work performed by the respondent's employees and those providing locomotive driving services to BHPB, a strict “like with like” comparison is somewhat difficult.  The fact remains that the operations are distinct and in my opinion, the present circumstances are distinguishable from the conclusions of the Commission in application A3 of 2005, which dealt with the provision of services directly to BHPB, where employees of the respondent and BHPB are working side by side performing the same work in the same work environment.  In this case, the respondent's employees are not working side by side with BHPB employees performing the same or substantially the same work in driving locomotives.

70 Given that wage fixation is far from a precise science, I have taken all these matters into account in my consideration of an appropriate rate of pay for the employees concerned.  I propose to use as a guide only, the rate of pay for a Level 4 locomotive driver under the BHPB Award, which was accepted as the appropriate comparison for a head end power only train operation, as opposed to the locotrol operations at BHPB.  Taking that rate of pay as a guide, I then consider it appropriate to discount that rate to account for the various factors to which I have referred.  These factors include the absence of a direct “like with like” comparison with BHPB, the circumstances of fly in fly out work compared to residential work, and inherent differences in the operations between Rio Tinto and BHPB rail operations. 

71 On the basis that the present hourly rate for a Level 4 BHPB locomotive driver casually employed is, according to exhibit A3, $54.47 per hour, and taking into account the rates payable under the Rio Award and the Agreement, adjusted to current times, and the factors I have referred to above, in my view, a fair casual rate of pay for a fly in fly out locomotive mainline driver engaged by the respondent is a discount of ten percent from the BHPB Level 4 rate that being $49.00 per hour in round terms.  I see no basis to differentiate between mainline and other work in reaching this rate.”

60       Following this, the Commission made reference to the Wage Fixing Principles.  At paragraph [73], the Commission commented that it was accepted that despite the terms of s26(1)(a) of the Act, the Commission in dealing with an application such as the present is required to apply the terms of the Wage Fixing Principles in the sense that not to do so would constitute error.  Reference was made to the 1993 RRIA case cited earlier in these reasons.  The Commission stated that the principles were to be applied.  The Commission then discussed the requirements which followed from the application of principle 11 of the Wage Fixing Principles.

61       In paragraph [74] the Commission referred to the present appellant’s submission that because of principle 11(a), any award made by the Commission would need to be structurally efficient, including the requirement for a minimum rates exercise.  By contrast, the Commission referred to the submissions of the present respondent, that the reference to structural efficiency in principle 11(a) acts simply as a reminder that awards must be structurally efficient in that they should not contain provisions that are a hindrance to productivity.

62       The Commission’s conclusions on this issue were expressed in paragraphs [77]-[79] which are as follows:-

“77 This is a case of the making of a first award to which Principle 11(a) applies. On its proper construction the focus of the Principle, according to the plain language of its terms, refers to the “main” considerations being employee interests and the needs of the particular enterprise.  This is the primary focus of Principle 11(a).  I consider the reference to “structural efficiency” as being secondary in focus.

78 It is important to appreciate that the beginning of the movement to “structural efficiency” took place in 1988 federally and flowed through to the State systems.  It commenced a broad ranging process of the review of awards in all jurisdictions to remove impediments to efficiency and productivity and to promote skills and career paths etc.  Nearly twenty years, on many changes have occurred in terms of amendments to legislation and focus of the various industrial relations systems.  In particular, the legislation in this State has diverged from that in the federal jurisdiction.  I am not persuaded to the narrow view of Principle 11(a) contended by Mr Blackburn.  What the Principle requires in my view is that any first award made is to be structurally efficient, in the sense that it is not to contain any provisions that would be a barrier to productivity and efficiency.  In the context of the present case, to only prescribe a true minimum rate, which would not reflect the rate paid, would not be properly taking account of the interests of the employees concerned, as the terms of the Principle require.  I also observe that at BHPB, the rates of pay have been assessed by the Commission in Court Session with some vigour, in terms of the overall worth of the work of a locomotive river in the Pilbara. 

79 Consistent with the observations I have just made, the remaining terms of the Proposed Award will reflect the requirement for the Commission to ensure that work can be efficiently organised and performed according to the respondent's needs.  I now turn to the remaining clauses of the Proposed Award as claimed.”

63       The Commission then considered the other terms of the award and said a minute of proposed orders would issue in the appropriate terms.

64       The main complaint of the appellant is that in making the award the Commission failed to follow the Minimum Rates Adjustment (MRA) process set out in the 1992 State Wage Case Decision and make an award containing properly fixed minimum rates with appropriate internal and external relativities.  It was argued that this was required in the making of the first award under principle 11 of the Wage Fixing Principles.  Second, and in the alternative, if the Commission was not required to strictly comply with the MRA process it was at least required to make a safety net award containing minimum rates.  Third, if it was possible for the Commission to make an actual rates award under principle 11 it was not entitled to do so without good reason.  It was submitted it was wrong of the Commission to say in its reasons (paragraph [68]) in effect that the main basis on which to assess wages was to provide “an adequate and fair rate of wage or salary for the purposes of ss 6(ca) and 26(1)(d)(vi) of the Act.”  In making such a finding it was argued the Commission failed to properly apply the Wage Fixing Principles and in particular the Structural Efficiency Principle.

65       The appellant argued the Commission was under a duty to apply the Structural Efficiency Principle.  It argued structural efficiency considerations are paramount under principle 11(a) and include the MRA process in the making of a new award.  The rates need to be fixed with the appropriate external relativities and in accordance with the MRA process which was and is an integral part of the Structural Efficiency Principle.

66       The appellant contended that the fact that the Structural Efficiency Principle has not since 1992 existed as a stand alone wage principle does not mean that the concepts embodied in the structural efficiency notion have been abandoned.  The appellant argued structural efficiency as referred to in principle 11(a) is not a mere reminder that awards must be structurally efficient.  It argued it is not the primary focus of principle 11(a) to consider employee interests and regard structural efficiency as secondary in focus.  To the extent that the Commission did so it was in error, the appellant argued.  It referred to paragraph [78] of the Commission’s reasons in which it said:-

“In the context of the present case, to only prescribe a true minimum rate, which would not reflect the rate paid, would not be properly taking account of the interests of the employees concerned, as the terms of the Principle require”.

67       The appellant argued that in making such a comment the Commission accepted the proposition that differences in the Federal and State legislation meant that first awards in the State jurisdiction were no longer required to operate as a true minimum safety net for enterprise bargaining.  The appellant argued this was a misdirection.

68       The appellant submitted the Commission was wrong in concluding that these differences were such that it was not now required to make a minimum rates award.  The appellant argued that the Commission did not indicate which differences it was relying on, and also it is an irrefutable fact that the State Wage Fixing Principles of 2005 under which this application was bought still continued to reflect the National Wage Principles and the Commission was obligated to apply them.

69       The appellant drew to the attention of the Full Bench, in some detail, the historical developments in the Wage Fixing Principles which arguably supported their submissions.  In a number of State Wage Case decisions it was recognised that there will be employees who will be unable to reach agreements.  The appellant argued the Wage Fixing Principles envisage that those employees are to be protected by safety net awards containing minimum rates and conditions and with the benefit of safety net adjustments.  In such circumstances the Commission had a duty to apply the Wage Fixing Principles and make an award containing minimum terms and conditions, the appellant argued.  It contended the Commission at first instance determined that the award rates were to reflect a fair adjustment to the rate of pay for employees concerned, consistent with the terms of the Act.  It was submitted this demonstrated the Commission was not applying the Wage Fixing Principles but complying with what it perceived to be an obligation under the Act.  It was argued the Wage Fixing Principles make it clear that s26 of the Act is one of the foremost drivers in determining whether or not to give effect to the National Wage Case.  The contents of s26 of the Act were not, so the appellant argued, required to be applied by the Commission as if an element separate to the Wage Fixing Principles.

70       It was submitted by the appellant that if awards are made and varied in accordance with the Wage Fixing Principles including the MRA process then employees’ interests will be adequately protected while at the same time maintaining an incentive to bargain.  In this context it was argued there was no need for the Commission at first instance to step outside the Wage Fixing Principles or not to apply the MRA process and impose its own form of protection.  It was argued there is nothing in the Act which renders the MRA process inappropriate or redundant or detracts from the notion that awards should operate as minimum safety net awards.  It was argued that s26 of the Act is not inconsistent with MRA process.  It was argued there was a requirement to make a minimum rates award.  The appellant argued that awards in the State jurisdiction, in particular those in the private sector, have always provided for minimum rates of pay and conditions of employment.  (See The Honourable Minister for Education, Employment and Training, The Honourable Minister for Community Service and Others, The Honourable Premier of Western Australia and Others, and the Library Board of Western Australia and Others v The Australian Liquor, Hospitality and Miscellaneous Workers Union, Miscellaneous Workers Division, Western Australian Branch (1995) 75 WAIG 14).

71       The respondent, also in some detail, took the Full Bench to Wage Decisions of the State and Federal Commissions for the purpose of arguing that the Commission at first instance had correctly identified the roll of structural efficiency in determining a first award, in accordance with principle 11 of the Wage Fixing Principles.  In particular the respondent submitted the Commission was correct in paragraph [78] of its reasons when it said that the reference to structural efficiency in principle 11(a) of the Wage Fixing Principles required that an award “be structurally efficient, in the sense that it is not to contain any provisions that would be a barrier to productivity and efficiency”.  The respondent argued that the flexibilities contained within the award determined by the Commission furthered this purpose and was not inconsistent with principle 11 of the Wage Fixing Principles.  The respondent also argued that the award was properly described as a minimum rates award because it would be open to an employer to pay an employee above the rates prescribed in the award.

72       The determination of these grounds of appeal involves questions of construction with respect to principle 11(a) of the Wage Fixing Principles.  In our view, “structural efficiency considerations” as referred to in Wage Fixing principle 11(a) are not a secondary consideration as indicted by the Commission in paragraph [77] of its reasons.  In our opinion “structural efficiency considerations” are part of what is described in principle 11(a) as the main consideration, being that the award meets the needs of the particular industry or enterprise while ensuring that employees’ interests are also properly taken into account.

73       We also note that principle 11(a) does not refer to the Structural Efficiency Principle but simply “structural efficiency considerations”.  There is therefore some ambiguity within the principle which has led to the differing arguments of the parties and the opinion expressed by the Commission in paragraph [78] of its reasons.  Given the lack of clarity, it is permissible and relevant to have regard to the reasons of the Commission which accompanied the making of the General Order including the Wage Fixing Principles.

74       These reasons make it clear in our opinion that the reference to “structural efficiency considerations” in principle 11(a) is a reference to the Structural Efficiency Principle.  This is because, at paragraph [32] of its reasons, the Commission in Court Session referred to a submission made by the Trades and Labour Council of Western Australia (TLC) that “the reference in Principle 11 to the Structural Efficiency Principle should be deleted in so far as it refers to new awards”.  The Commission in Court Session decided not to amend principle 11 from the form in which it had existed prior to the establishment of the 2005 Wage Fixing Principles.  Further, if the Commission in Court Session was of the view that the Structural Efficiency Principle was not truly part of principle 11, as argued by the respondent and accepted by the Commission at first instance in this case, its reaction to the submission made by the TLC to it, would be that it was unnecessary to delete the Structural Efficiency Principle from principle 11 of the Wage Fixing Principles.  The Commission in Court Session did not, however, do this.  Instead it considered the submission and decided at paragraph [37] that to “amend the Principle on the basis proposed by the TLC for new awards would depart from the fundamental and important purpose of the Structural Efficiency Principle and we are not convinced that it ought to be done”.  Prior to coming to this opinion, the Commission in Court Session briefly reviewed the history of the Structural Efficiency Principle in the following terms:-

“33 We have considered the submission by the TLC and respond to it as follows.  In the August 1998 National Wage Case Decision (Print H4000) the AIRC discontinued the Restructuring and Efficiency Principle and established the Structural Efficiency Principle “to facilitate the type of fundamental review essential to ensure that existing award structures are relevant to modern competitive requirements of industry and in the best interests of both management and workers”.

34 In its April 1991 National Wage Case Decision (Print K0300) the AIRC analysed the effectiveness to that point of the parties’ efforts to implement the Structural Efficiency Principles and pointed to facts which gave rise to concern.  It made observations such as: “The emphasis has been based on the classification restructuring, training and associated issues; other areas have been addressed but with less emphasis”.  It observed there is no limitation of the agenda available for structural efficiency exercises and in particular it observed that where the parties may have made substantial changes to the award there seems to have been little impact at the enterprise level.  This, the AIRC emphasised was inconsistent with the Structural Efficiency Principle.  It was not contemplated that award change alone could achieve the purpose of the Principle and that change must be applied as necessary at the workforce level in order to achieve real gains.

35 In short, the AIRC opined that application of the Principle was an essential step towards institutional reform which was a prerequisite to a more flexible system of wage fixation.  The focus therefore was that the purpose of the Principle was to create a structured approach which would cause the parties to assess objectively their efforts to date but with focus on the attention of management and employees on measures to improve efficiency and productivity at the workplace level. 

36 The underpinning philosophy of the Structural Efficiency Principle was therefore changed to efficiency and productivity at the workplace level.  It was not merely that awards ought to be recast so that they were in some way internally structurally efficient.  The Principle is not about how an award, including a first award, looks.  It is about how businesses function in terms of efficiency and productivity at the workplace level.  In the December 1992 State Wage Case ((1992) 72 WAIG 191) the Commission in Court Session endorsed with approval this understanding of the intent and purpose of the Principle.”

75       Due to the reasons expressed by the Commission in Court Session, we are of the opinion that the Structural Efficiency Principle is being referred to in principle 11 and applies to the making of a first award.  Accordingly, and with respect, the Commission was in error in deciding the meaning of “structural efficiency considerations” in principle 11(a) in paragraph [78] of its reasons.  Accordingly, the Commission misdirected itself in determining the proper rates of pay of the employees to be covered by the award.

76       In our opinion the Wage Fixing Principles required the application of the Structural Efficiency Principle as described by Commissioner Scott in The Independent Schools Salaried Officers Association of Western Australia, Industrial Union of Workers v Anglican Schools Commission (Inc) and Others (2000) 80 WAIG 3198.  Commissioner Scott dealt with the issue in considerable detail at paragraphs [21]-[28].  The Commission said as follows:-

[21] The Wage Fixation Principles are established in a regime where the award forms the safety net on which enterprise bargaining builds.  This safety net sets the minimum rates and conditions which are to apply, and in the case of an industry award, sets those common rights and obligations which protect the parties and form the platform for parties, at enterprise level, to provide for their own needs.  It is noted that a number of the existing Wage Fixation Principles deal with existing awards in that they refer to an award or agreement being varied or another award being made (Principle 2) as opposed to the making of a first award, which is specifically dealt with under Principle 11.  Principle 10 – Making or Varying an Award or Issuing an Order Which Has the Effect of Varying Wages or Conditions Above or Below the Safety Net assumes that there is already in existence an award which provides a safety net.  In the present case, this does not apply.  This is an application for a first award.  The employees who would be covered by it are award free.  Therefore, Principle 11 – First Award and Extension to Existing award, in particular paragraphs (a) and (b), apply.  This states:

“11. First Award and Extension to an existing Award

The following shall apply to the making of a first award and an extension to an existing award:

(a) In the making of a first award, the main consideration shall be that the award meets the needs of the particular industry or enterprise while ensuring that employees' interests are also properly taken into account.  Structural Efficiency considerations shall apply in the making of such an award.

(b) A new award shall have a clause providing for the minimum adult award wage [see Principle 9] included in its terms.”

[22] Paragraph (a) requires that structural efficiency considerations are to apply.  The Structural Efficiency Principle has been in operation since 1988 (68 WAIG 2412).  It states:

“Structural Efficiency

Increases in wages and salaries or improvements in conditions shall be justified if the union(s) party to an award formally agree(s) to co-operate positively in a fundamental review of that award with a view to implementing measures to improve the efficiency of industry and provide workers with access to more varied, fulfilling and better paid positions. The measures to be considered should include but not be limited to:

• establishing skill-related career paths which provide an incentive for workers to continue to participate in skill formation;

• eliminating impediments to multi-skilling and broadening the range of tasks which a worker may be required to perform;

• creating appropriate relativities between different categories of workers within the award and at enterprise level;

• ensuring that working patterns and arrangements enhance flexibility and the efficiency of the industry;

• including properly fixed minimum rates for classifications in awards, related appropriately to one another, with any amounts in excess of these properly fixed minimum rates being expressed as supplementary payments;

• updating and/or rationalising the list of respondents to awards;

• addressing any cases where award provisions discriminate against sections of the work-force.”

[23] For a number of years the Wage Fixation Principles specified that the main consideration in the making of a first award was the existing rates and conditions.  This is no longer the test to be applied by the Principles.  Rather it is that set out in Principle 11 that the main consideration is that the Award meets the needs of the particular industry or enterprise while ensuring that employees’ interests are also properly taken into account.  This Award, being a first award, will establish the minimum rates of pay and conditions of employment and will be the safety net on which future enterprise bargaining agreements may be established.  I note from my experience in dealing with this industry and from the Commission’s records that many enterprise bargaining agreements come before the Commission for registration and it appears that a number of the psychologists and social workers who would be the subject of this Award have their rates of pay and conditions of employment linked to some existing enterprise bargaining agreements.  The parties to this Award have a clear understanding of and experience in enterprise bargaining such that they would make use of the Award as a minimum conditions of employment award and as a safety net upon which to develop their enterprise bargaining. 

[24] The establishment of appropriate rates of pay and conditions of employment is not to be done by reference to comparative wage justice.  Comparative wage justice has not been a method of fixing wages and conditions within the industrial relations system in Western Australia for some years.  The focus has been on enterprise bargaining and structural efficiency.  However, for the establishment of the safety net, appropriate minima must be established and the Structural Efficiency Principle sets out that appropriate wage relativities between different categories of employees within the award and at enterprise level, and the proper fixing of minimum rates for classifications and awards, related appropriately one to another, are to be considered.  It is an exercise which will require consideration of the duties and responsibilities of the positions and the circumstances under which the work is done.  Guidance may be available from other awards and agreements for the purpose of properly establishing those rates and conditions.  It is no longer appropriate to establish a nexus which will create linkages between awards which provide for flow-on.  However, it is necessary, in the exercise of properly setting rates of pay and conditions of employment, to examine other rates of pay and conditions of employment of employees engaged in like capacities with like duties and responsibilities and in similar work environments. 

[25] According to the information and the evidence before the Commission, many of the employers, in arriving at rates of pay for their employees, have taken account of a range of other rates and conditions including those applying to social workers and psychologists engaged in the government education sector, to teachers engaged in the independent schools sector, and to psychologists engaged in the NGSPS.  There is a certain circularity about much of these comparisons.  However, they all seem to provide some basis upon which to consider the salaries and conditions of employment to apply to professional persons engaged in, subject to what is to follow, relatively independent and, in some circumstances and some senses, relatively isolated positions.  This Award will not cover a significant number of employees and the largest group being social workers engaged within the Catholic schools system.

[26] For the purpose of considering the appropriate approach to be taken to the establishment of an award to cover the terms and conditions of employees whose relationships with their employers was, until that point, award free, and for the purpose of considering some of the issues in dispute, it is necessary to set out some of the principles applicable to a first award.  The principles regarding the making of an award are set out in the Reasons for Decision of Brinsden J. in Hamersley Iron Pty Limited -v- Association of Drafting, Supervisory and Technical Employees Western Australian Branch (IAC) 1984 (64 WAIG 852 at 853):

“No doubt where a union seeks an award for those persons over whom it has industrial coverage, and there is no bona fide opposition to it, a Commission will usually form the view that the substantial merits of the case require the making of an award but before reaching that conclusion it would need to consider all of the provisions of s.26(1) as, for example, the interested persons immediately concerned whether directly effected or not and where appropriate the interest of the community as a whole.  I do not think it proper to erect as a proposition of law previous rulings that a union is prima facie entitled to an award.  In all cases it will be necessary to reach the decision in light of the provisions of section 26 and it would seem that the union which desires an award would have the burden of establishing that on the substantial merits of the case an award should be made.”

(page 853)

[27] It has been stated many times that the onus lies on the applicant in the making of a new award (94 CAR 579; 95 CAR 148; 43 QIG 205; 62 WAIG 2418; 63 WAIG 658; 64 WAIG 852).  This means that before the Respondents have a case to answer, the Union needs to establish the basis for the terms it proposes to be granted.  As noted later in these reasons in relation to a number of matters, the Commission has had to come to its conclusions without assistance of evidence from either side.  In this type of jurisdiction, some flexibility is usually applied to enable some reasonable and fair conclusion.  Without evidence, some assumptions may be necessary to enable conclusions to be reached.

[28] The purpose of an award is to provide industrial safeguards to protect both employees and employers.  Rates of pay and conditions of employment which have been settled by agreement between other parties or between these parties in other circumstances are not an appropriate base upon which to establish, by arbitration, rates and conditions for these parties in these circumstances although they may be considered when they are “fair, proper and reasonable in all the circumstances” (AFMEPKIU -v- Anodisers WA and Others (CICS) 23 November 1998, Application No. 885 of 1997 (unpublished)) (Amalgamated Metal Workers and Shipwrights Union of Western Australia  -v-  Anchorage Butchers Pty Ltd (1982) 62 WAIG 1709) and (Municipal Officers Association and Melbourne Metropolitan Board of Works 165 CAR 478 @ 484 and re Transport Workers (Northern Territory) Award 1973 241 CAR 336).  In this context, rates of pay and conditions contained within an enterprise bargaining agreement, consent award or consent award amendment may not be a useful guide.  Awards which contain rates of pay which have been properly set through the minimum rates adjustment process, which have been properly assessed according to the appropriate criteria, and form an objective basis may be useful.  Conditions of employment determined on their merits, having regard to all of the circumstances, can be relied upon for the purposes of arbitration.  Otherwise, there is the need for the Commission to consider all of the circumstances including the merits of the case and determine the appropriate rates and conditions. 

77         We agree with the exposition by Commissioner Scott that the principles need to be applied in this way when dealing with a first award as was the case here.

78       An examination of the award made indicates that it established a single minimum rate of wage to be paid to one classification of train driver employed by the respondent.  The award is deficient because of this.  There are for example no rates for locomotive drivers of bankers or yard drivers.  An application of the Structural Efficiency Principle could well have led the Commission to the conclusion that such rates needed to be fixed.

79       The Commission at first instance faced issues very similar to those set out in paragraph [27] of Commissioner Scott’s reasons.  Ultimately the pay rates provided in an award must be fair, proper and reasonable in all of the circumstances.  Rates and conditions contained within enterprise bargaining agreements, consent awards or consent award amendments are usually not a proper guide.  Awards which contain rates of pay which have been properly set according to appropriate criteria form an objective basis and may be useful.  Conditions of employment determined on their merits having regard to all of the circumstances can be relied upon for the purpose of arbitration, otherwise there is a need for the Commission to consider all of the circumstances including the merits of the case and determine the appropriate rates and conditions.  This is to be done as part of the application of the Structural Efficiency Principle.

80       It seems to us that despite its misconception of the role of the Structural Efficiency Principle in principle 11(a), to some extent the Commission attempted to adopt this process.  This is despite the fact that in our view the Commission misdescribed the position in saying the rates to be fixed in the award were other than minimum rates of pay.  The Commission was not in error in not relying on consent awards.  The Commission was entitled to conclude that the BHP Award rates which had been set by the Commission in Court Session had some relevance.  We also note the Commission discounted the BHP Award rates for the reasons which are quoted above.

81       It seems that in establishing only one rate in the award the Commission did not comply with the Structural Efficiency Principle.  Because they do not provide for all of the categories of driver the rates fixed do not establish a skill related career path which provides incentive for workers to participate in skill formation.  As there is a lack of creation of the appropriate relativities between categories of workers within the award and at enterprise level there is a bar to ensuring that working patterns and arrangements enhance flexibility and efficiency in the industry.  These are some of the effects of the application of the Structural Efficiency Principle which on the face of this award are not present.

82       For these reasons we uphold these grounds of appeal insofar as they assert the Commission was in error in failing to apply the Structural Efficiency Principle to the making of the award.  The appropriate course is in our opinion to remit the matter to the Commission so that this may occur.  This is a process which is appropriate to be carried out by the Commission at first instance.  It is not something the Full Bench should engage in.

83       The appellant accepted that the Full Bench was bound to follow the Industrial Appeal Court decision of BHP Billiton Iron Ore Pty Ltd v CFMEU [2006] WASCA 49.  This decision held that despite the impact of the Work Choices legislation on the jurisdiction of the Commission, a matter subject to appeal may presently still be remitted to the Commission at first instance for reconsideration.

84       The appellant did argue that if the appeal was allowed the application for the award should be dismissed.  This submission depended in part upon which grounds of appeal the Full Bench might uphold.  In our opinion, given the grounds of appeal allowed, we are of the view that remittal is the appropriate course.  This view would not be altered by any acceptance of grounds of appeal 9-11 and 13-14.

Ground 9

85       This ground asserts that the Commission erred in using the BHP Award rates as a guide, for the reasons particularised in the ground.  This ground is to some extent unnecessary to determine given the conclusions reached with respect to grounds 5, 7 and 8.  The matter is to be remitted to the Commission so that the award can be determined in accordance with the Structural Efficiency Principle.  In engaging in this exercise it would not be inappropriate in our opinion for the Commission to have regard to the rates paid under the BHP Award, so long as the Commission has regard to the particular facts and circumstances relevant to the setting of the BHP Award rates.  These matters were taken into account by the Commission in paragraph [69] of the reasons for decision.  If the BHP Award was to be considered by the Commission in the determination of the rates under the present award then the Commission should take into account whether there is evidence as to how those rates have been arrived at or the particular penalties, allowances and disabilities for which they represented compensation.

86       In all of the circumstances nothing more needs to be said about this ground.

Ground 10

87       This ground asserts that in awarding a rate which was only 10 percent less than the BHP Award Level 4 aggregate rate, the discounts being said to reflect the factors identified in the decision, the Commission failed to make any allowance or adequate allowance for the differences in shift rosters between the BHP employees and the appellant’s employees.

88       In our opinion if the Commission is to have regard to the BHP Award rates in setting new rates under the award, it would be appropriate to make allowances for the differences in shift rosters between the BHP Award employees and the appellant’s employees.

89       Again, in the circumstances nothing more needs to be said about this ground.

Ground 11

90       This ground asserts in the first instance that in awarding a single rate of pay to all employees covered by the award the Commission erred in failing to distinguish between work performed on the mainline and other work including the work performed by banker drivers.  This issue has been referred to earlier in our reasons dealing with grounds 5, 7 and 8.  In our opinion the award should have been structured so that there was a distinction between the work performed by the different categories of locomotive drivers.  This issue can be addressed when the matter is remitted to the Commission at first instance.

91       Ground 11 also asserts that the Commission erred in awarding the same aggregate rate (which rate was intended to include compensation for all penalties and shift premiums) to employees who worked a 14 day on/14 day off 42 hour roster as to employees who worked a 14 day on/7 day off 56 hour roster.  In our opinion the rates to be awarded by the Commission when the matter is remitted to him should include some differentiation based on whether employees work a 14 day on/14 day off 42 hour roster or a 14 day on/7 day off 56 hour roster.  This is because of the additional amount of overtime, shift and weekend penalties which an employee working a 56 hour roster would ordinarily incur over and above an employee working a 42 hour roster.  Accordingly, there should be a wage difference between the aggregate wage of an employee working 42 hours a week and the aggregate wage of an employee working 56 hours a week.

92       Again, in the circumstances of remittal, nothing further needs to be said about this ground.

Leave Entitlements – Grounds 13 and 14

93       In these grounds the appellant asserts the Commission at first instance erred in awarding 13 weeks of long service leave after 10 years of service and in awarding 5 weeks of annual leave and an additional week for shift workers when the standard of the Commission is four weeks of annual and an additional week for shift workers.

94       In our opinion the issues of leave entitlements can be revisited when the matter is remitted to the Commission.  However there is nothing unusual about long service leave and annual leave entitlements in the terms prescribed in the award by the Commission, for work which is done in the Pilbara region.  By way of example one may have regard to, with respect to annual leave, clause 23(1)(a) of the Metal Trades (General) Award 1966, clause 23(6) of the Public Service Award 1992, clause 17(1)(a)(i) of the Cargill Australian Limited – Salt Production and Processing Award 1988, clause 9.2 of the Dampier Salt Award 2004 and clause 22(1) of the Iron Ore Production and Processing (Hamersley Iron Pty Ltd) Award 1987.  With respect to long service leave, examples are clause 34 of the AWU Gold (Mining and Processing) Award 1993, clause 9.4 of the Dampier Salt Award just cited and clause 24(6) of the just cited Hamersley Iron Award.

Conclusion

95       In our opinion, the appeal should be allowed, the order made by the Commission suspended and the matter remitted to the Commission for further hearing and determination.  A minute of proposed orders will issue in those terms.