2001 WAIRC 04082
100107827
BHP IRON ORE AWARD

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION OF WORKERS - WESTERN AUSTRALIAN BRANCH
APPLICANT
-V-

BHP IRON ORE LIMITED, THE AUSTRALIAN WORKERS' UNION, WEST AUSTRALIAN BRANCH, INDUSTRIAL UNION OF WORKERS, COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING, AND ALLIED WORKERS UNION OF AUSTRALIA, ENGIN & ELECT DIV, WA BRANCH
RESPONDENT
CORAM CHIEF COMMISSIONER W S COLEMAN
COMMISSIONER A R BEECH
COMMISSIONER S J KENNER
COMMISSION IN COURT SESSION
DELIVERED FRIDAY, 2 NOVEMBER 2001
FILE NO/S A 2 OF 2001
CITATION NO. 2001 WAIRC 04082

_______________________________________________________________________________
Result
Representation
APPLICANTS MR D SCHAPPER (OF COUNSEL) ON BEHALF OF THE AFMEPKIU
Mr M Llewellyn on behalf of the AWU
Mr J Murie on behalf of the CEPU

RESPONDENT MR H DIXON (OF COUNSEL) ON BEHALF OF THE RESPONDENT AND WITH HIM MR M LUNDBERG (OF COUNSEL)

Mr R Gifford on behalf of AMMA

_______________________________________________________________________________

Reasons for Decision

1 COMMISSION IN COURT SESSION: In April 2001 the Automotive Food, Metals, Engineering, Printing and Kindred Industries Union of Workers, Western Australian Branch (AFMEPKIU), the Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia – Western Australian Branch (CMETSWU) and the Transport Workers Union of Australia, Industrial Union of Workers, Western Australian Branch (TWU) filed an application for an award, the BHP Iron Ore Award 2001 (the Unions’ proposed award) to cover employment in the operation of BHP Iron Ore Pty Ltd (BHPIO) previously covered by the Iron Ore Production and Processing (Mt Newman Mining Company Pty Ltd) Award No 29 of 1984 (the Award) and subsequent agreements. The Australian Workers’ Union, Western Australian Branch, Industrial Union of Workers (AWU) and the Communications, Electrical, Electronic, Information, Postal, Plumbing and Allied Workers Union of Australia, Engineering and Electrical Division, WA Branch (CEPU) were subsequently joined as applicants to the proposed new award, subject to minor variations sought by those two unions.
2 The Unions’ proposed award was met by way of answer and counterproposal by BHPIO with an application for a counterclaim award to be known as the Iron Ore Production and Processing (BHP Iron Ore Pty Ltd) Award No A2 of 2001 (BHPIO proposed award). (Note: Mt Newman Mining Company Pty Ltd changed its name to BHPIO on 31st January 1991). BHPIO’s operations include quarrying, mining, crushing, treating, storing, transporting, loading and unloading iron ore and operations incidental thereto in the Pilbara region of Western Australia. Those operations have been conducted from in or around 1969.
3 The Australian Mines and Metals Association presented submissions on the application of the Wage Fixing Principles to the claims.
4 BHPIO’s principal operations are conducted at the mines around Newman, Yandi and Yarri where the ore is mined and loaded onto railway trucks and railed to Nelson Point and Finucane Island at Port Hedland for processing and shipping. Contractors to BHPIO conduct all BHPIO mine operations except those at Mt Whaleback at Newman.
5 In addition to the Award, BHPIO and the unions are parties to the following industrial agreements:
(a) the BHP Iron Ore Enterprise Bargaining Agreement registered on 14th July 1993 (“EBA 1”);
(b) the BHP Iron Ore Pty Ltd – BHP Iron (Goldsworthy) Pty Ltd Enterprise Bargaining Agreement registered with the Commission on 24th November 1995 (“EBA 2”);
(c) the BHP Iron Ore Enterprise Bargaining Agreement 1997 registered on 13th July 1998 (“EBA 3”); and
(d) the BHP Iron Ore Pty Ltd Driver Only Operation Agreement 1999 registered in the Commission on 21st April 1999 (“DOO”).

6 By an Order of the Commission dated 16th March 2001 the parties are also bound by the terms and conditions of the Industrial Relations Agreement (1997 – as amended 1999) (unregistered). This document sets down “understandings which will govern the future relationship between the parties”. It includes the method of progressing industrial problems, arrangements for the utilisation of contractors and the performance of duties by site union representatives.
7 Mr Jeffrey Stockden, Vice President of Human Resources, BHPIO filed a witness statement in these proceedings. In it he provides details of the development of industrial regulation in BHPIO’s operations and a history of events that culminated in the applications for a new award. We draw on Mr Stockden’s statement to summarise those developments.
8 The Award was made by consent. However some of the terms and conditions included in the Award were the subject of arbitration by the Commission in the 1970’s.
9 Mt Newman Mining Company Pty Ltd (Mt Newman) originally operated what are now the operations of BHPIO at Newman and Nelson Point, together with the rail operations between Newman and Nelson Point.
10 In 1986 the Commission registered the Industrial Relations (Mt Newman Mining Company Pty Ltd) Order (“the 1986 IR Order”). This put in place procedures designed to resolve disputes without recourse to work stoppages ((1986) 67 WAIG 198). However, in mid-1987, there were a significant number of stoppages. Mt Newman entered into negotiations and a 2 month moratorium on industrial action was agreed to by the unions. This broke down and in November 1988 the 1986 IR Order was cancelled and replaced with the Industrial Relations (Mt Newman Mining Company Pty Ltd) Order pursuant to Application No C 822 of 1986 ((1989) 69 WAIG 279) (“the 1988 IR Order”). The company identified that one of the major changes under the 1988 IR Order was the removal of convenor benefits, recognition of various union representatives and a number of paid meetings.
11 During 1989 Mt Newman and the unions negotiated a new industrial relations agreement, the 1989 IR Agreement. It set out to govern the future relationship between the parties and identified the following principles:
(1) The viability of Mt Newman Mining Company as a secure and profitable enterprise is of critical concern to the parties.
(2) A viable operation will provide secure employment, opportunity for development and fair remuneration and benefits for employees.
(3) Reliability of supply and consistency of quality is also essential to the ongoing economic operation of the company.
(4) The development of trust and motivation within the company is essential to the future of Mt Newman Mining Company.
(5) Honesty, mutual respect and a business like attitude must prevail at all times.
(6) Every employee will be treated fairly and equitably.
(7) A safe working environment is the right of every employee.
(8) The parties acknowledge that ongoing change is necessary to maintain the viability of the operation and further agree that any introduction of change will be processed through the agreed procedures.
(9) The parties agree to an exchange of information and ideas and an opportunity for input into all matters which directly affect employees.
(10) The parties understand the need to have and develop effective communications throughout the organisation.
(11) The parties accept their wider social obligations and will consider their actions in this context.
(12) The parties are committed to the satisfactory and timely resolution of any differences or disagreements by those directly involved as appropriate.
(13) The parties accept and acknowledge the structures, responsibilities and accountabilities of each other.
12 The 1988 IR Order in C 1189 of 1988 was cancelled. However the 1989 IR Agreement was unregistered.
13 In November 1997 the 1987 IR Agreement was revised by agreement between BHPIO and the unions. The document reiterated the principles set out in the 1989 IR Agreement and the commitment to continuity of operations (JMS 37). The Agreement remained unregistered but provided that the Western Australian Industrial Relations Commission had recorded that either party may withdraw from the Agreement by giving 30 days’ notice.
14 In October 1998 BHPIO embarked on a plan “Vision 2005” to focus on cultural change across the organisation. It was directed at lowering the costs of production whilst increasing the output of iron ore. The plan included a reduction in the number of employees.
15 In February 1999 iron ore industry negotiations in Japan determined a new global price for iron ore. For BHPIO this resulted in a 10% reduction in price and a significant drop in tonnages. This meant that BHPIO had to reduce the cost of production and change the manner in which it as operating. It did not have until 2005 to cut production costs. Management considered that this had to be done as soon as possible. A voluntary redundancy program commenced in March 1999.
16 The parties met in March 1999. Among matters discussed were EBA 4 and the IR Agreement. BHPIO indicated its objective to renegotiate the 1997 IR Agreement to bring its workplace more into line with its competitors. BHPIO sought to eliminate paid union meetings and the excessive time representatives spent off the job. A proposal was put to the unions in April 1999 for revised arrangements for progressing industrial relations matters. However between April and July 1999 there was industrial action. The unions formally rejected BHPIO’s proposal in May 1999 and sought to establish the position whereby the 1997 IR Agreement would not be varied prior to the negotiation of EBA 4 in November 1999.
17 BHPIO gave notice of the termination of the 1997 IR Agreement and a variation was eventually negotiated in July 1999. The circumstance under which the new document was negotiated is set out in Mr Stockden’s witness statement paragraphs 192 to 214.
18 The revised IR Agreement included deletion of the provision for union convenors to take fortnightly off-site work release and changed arrangements for shop steward meetings, mass meeting and pre-shift meetings.
19 Clause 10 – Status Quo which provided the following was deleted from the revised document.

“10.0 Status Quo
1. Means all established and agreed practices and/or procedures including those that have been negotiated at the employer/union level.

2. Where there is disagreement as to which work constitutes status quo, the parties shall immediately discuss ways in which normal operations will proceed without prejudice to the position of the parties in subsequent discussions of proceedings.”

However with the clause providing for the method of progressing industrial problems the requirement that “Status Quo will continue when matters are being progressed” was retained in the revised IR Agreement (Clause 3) – BHPIO Industrial Relations Agreement (1997 – as amended, 16 July 1999).
20 Other factors which impinged either directly or indirectly on the relationship between the parties in 1998 – 1999 were the competition between some of the unions at BHPIO for union members and the merger discussions and due diligence exercise with Hamersley Iron. The former caused considerable disruption and the latter gave added impetus to the imperative for BHPIO to bring its production costs into line with those of its competitors.
21 Issues of union coverage were the subject of proceedings under section 72A of the Act before the Full Bench of the Commission with a decision being handed down on 22nd September 1999 ((1999) 79 WAIG 2998).
22 While industrial relations matters were not key issues in the merger discussions with Hamersley Iron they did stand out for BHPIO’s management in comparing production costs with its competitors. On BHPIO’s assessment, Hamersley Iron was seen to have a 25% to 30% productivity advantage as a result of their arrangements whereby all employees were staff appointments. The due diligence exercise was subsequently considered to have been the catalyst for BHPIO to offer workplace agreements under a non collective arrangement.
23 The decision of Kenny J of the Federal Court in Australian Workers Union v BHP Iron Ore Pty Ltd [(2001) 102 IR 401] sets out in detail developments which culminated in offers of workplace agreements to employees in November 1999. The course of that development in Kenny J’s decision also covers consideration which was being given to BHPIO’s strategies for a “revolutionary EBA” to replace the document which was to expire in November 1999. Kenny J notes that in September 1999 BHPIO was considering three principal scenarios. The first was a tough enterprise bargaining agreement to replace EBA 3 with no IR Agreement. This entailed abolishing the IR Agreement entered into in July 1997, only a minor wage increase, staff doing wages work, 12 hour shifts for locomotive drivers and for rolling stock maintenance. There would be no compromise (Kenny J (op cit) paragraph 135).
24 The second scenario was a “low level roll over EBA” with provision for WPA’s to be “dribbled out” in response to a “groundswell” from the workforce (Kenny J (op cit) paragraph 136).
25 Within the final possibility were the options of a collective workplace agreement or the roll over of the then current EBA.
26 Next BHPIO considered delaying EBA negotiations and “just offering WPA’s in response to groundswell”. It was the two final options within this scenario which were subsequently adopted by BHPIO (Kenny J (op cit) paragraph 137).
27 In September 1999 the industrial relations environment on BHPIO’s assessment included the following:
1. Major downsizing March – December 1999
2. Merger talks with Hamersley Iron had created the expectation of WPA’s in the workforce
3. There was an expectation that something was going to happen in November 1999 (EBA 3 expired at that time)
4. Workforce perception that employment prospects outside BHPIO were enhanced if on WPA’s
5. The unions’ single bargaining unit was breaking down
6. Section 72A decision from the Full Bench
7. The opportunity created by a confused/disillusioned workforce
(Kenny J (op cit) paragraph 138)
28 Kenny J (op cit) states:

“By letters dated 9 November 1999, BHPIO wrote to all its employees bound by the Award offering them WPA’s pursuant to the WPA Act. The offer was made to all employees bound by the Award other than those who had confirmed their acceptance of an offer of voluntary redundancy as part of BHPIO’s restructuring program or implementation of driver only rail operations. The package that was sent to each employee included a letter offering the employee a “staff position” with a new title upon the condition that the employee sign the enclosed WPA to be registered under the WPA Act. The letter set out a new total salary and other benefits and stated:
“Should you accept this offer your conditions of employment will be in accordance with this letter of offer, the attached Workplace Agreement and Staff Contract of Employment.”
In addition the letter advised that:
“[Y]our entitlement to annual leave (including airfare travel assistance), sick leave and long service leave accrued to date will be preserved and recognised in your staff position.
In addition, under the Staff Sick Leave benefits, you will be entitled to salary continuance during absences due to illness or injury to a maximum period of 12 months. As a result, if you accept this offer, you may elect, if you wish, to have your accrued sick leave paid out.”

Also included in the package were an Explanation of Offer; “Changes at a glance – A Comparison between Award and Staff Employment”; and “What the Change Means for You: Key Questions and Answers on the Staff Employment Offer”. The “Key Questions” document relatively stated:
“It is your choice as to whether you are a union member – this is not affected by your accepting the staff offer.
…
Your acceptance of the offer is completely up to you.
If you do not choose to sign the Agreement, your employment will continue on the current terms and conditions of employment under the Award and the EBA.”

The “Staff Contract of Employment” advised: “You are required to comply with all the Company’s Staff Handbook, workplace policies and procedures as amended from time to time.” Employees were advised in the material sent to them that the Staff Handbook provided: “An employee is entitled at any stage of [an issue resolution process] procedure to have in attendance a work colleague to assist them in the progression of the issue.”
29 There were no negotiations between the parties about EBA 4 during 1999 nor subsequently. EBA 3 (together with EBA’s 1 and 2 and registered agreements) continued to apply to employees that did not take up WPA’s.
30 Information provided by BHPIO states that the company currently employs approximately 1600 employees at Perth and in its Pilbara operations. Employees are identified as:
a. Approximately 560 traditional staff employees such as management, professional employees, administration and support staff; and
b. Approximately 1040 employees who are traditionally covered by the Award and EBA’s.
31 However of the 1040 traditional Award and EBA employees there are about 550 employees who are award free by reason of accepting the workplace agreements BHPIO offered in November 1999 (JMS witness statement paragraphs 22 and 24).
32 Other information provided in the course of proceedings confirms that with the exclusion of apprentices, the split between employees covered by the Award and those working under WPA’s is 50% - 50%.
33 Mr D. Schapper representing the unions other than the AWU (Mr Llewellyn) and CEPU (Mr Murie), submitted a print out from the BHP Minerals website (http://www.bhp.com) to give an overview of the BHPIO corporate structure and its operations. An extract from this follows:
“BHP Minerals – Iron Ore
Introduction

BHP Iron Ore is part of BHP Minerals, a business group of BHP Limited (BHP). It encompasses the Mt Newman, Goldsworthy and Yandi joint ventures, the Jimblebar mine, Pilbara Energy Pty Ltd and BHP Direct Reduced Iron Pty Ltd. Joint Venture partners are Mitsui and Itochu. BHP Iron Ore holds quality certification to the international standard AS/NZS ISO 9002:1994.

BHP Iron Ore began producing high grade iron ore from the rich Mt Whaleback mine, near Newman, in 1969, twelve years after its discovery by Stan Hilditch. Since then, extensive exploration and drilling throughout the Pilbara has expanded resources to over 10 000 million tonnes.

Today, BHP Iron Ore’s future is underlined by its vast reserves of quality iron ores occurring in some 40 orebodies with access to the existing Newman to Port Hedland railway. Mt Whaleback, with remaining reserves of more than 750 million tonnes, continues to be the primary mine. The nearby Orebodies 18, 23, 25, 29 and 30, and Jimblebar have been developed to supplement production from Mt Whaleback. On a larger scale, the Yandi and Yarrie mines have added to the range of products available to BHP Iron Ore’s customers. Adjacent to Yandi is the yet to be developed Area C reserve containing around 1800 million tonnes of high grade ore.

As mine production has increased, so too has BHP Iron Ore’s capacity to rail and ship its products to steelmakers around the world and to BHP Steel in Australia. With the existing railroad infrastructure available for extensive new deposits, and modern iron ore processing, blending and shipping facilities at Port Hedland, BHP Iron Ore can respond quickly to the steel industry’s needs well into the twenty-first century.”
34 Mr D.J. Miller, Vice President Operations BHPIO outlined present industry trends and the demands to meet the future.
“Present trends in the iron ore market have made BHPIO’s higher production costs more significant. The iron industry has undergone significant recent consolidation namely the:
(a) Acquisition of North by Rio Tinto, giving it control of Robe River and allowing it to integrate these operations with its wholly owned Hamersley Iron business.

(b) The acquisition of Simitri and Ferteco in Brazil by the world’s largest producer, CVRD.

There has also been a trend towards the consolidation of customers in the market, for example, the formation in 1999 of the Corus Group through the merger of British Steel and Hoogovens, the recently announced merger of the three large European producers, Aceralia, Arbed and Usinor to create the world’s largest steel producer. Japanese Steel companies NKK and KSC have also announced their intention to merge – this will create the largest Japanese Steel producer.

With BHPIO’s competitors and customers developing into larger entities, I consider there is a very real need for BHPIO to ensure that it becomes more efficient as a business operation. These efficiencies can be gained through:
(a) better utilisation of the company’s capital assets (such as the company’s fleet of locomotives);
(b) lowering production costs; and
(c) developing a more efficient and flexible labour workforce.”

35 Developments in the international market and the challenges posed for BHPIO were matters of which the workforce represented by unions were not unaware. Mr Schapper pointed out that the drop in iron ore prices and the reduction in tonnages announced in March 1999 impacted most dramatically on the Mt Whaleback operations as steel makers showed a preference for cheaper ore such as Yandi. It was an appreciation of the impact of developments in the international market that drove the voluntary redundancy programme and in turn the Newman Business Efficiency Programme (“BEP”) (Union Material Folio 11: Attachment to R. K. Kumeroa’s witness statement).
36 The BEP recorded that the parties had held discussions in March 1999 and recognised that a joint effort must be made to improve the performance and efficiency of the Newman operations. It states that:

“The changes in the attached document have become necessary due to added pressure placed on the business resulting from price decreases and tonnage reductions commencing 1st April 1999.

Our costs must be compatible to our competitors (including contractors) to ensure the future security of the business operations and increased job security for its employees.”
(BEP page 1)
37 It is noted that in April 1999 in response to economic conditions the parties also entered into the DOO. The document registered in the Commission on 21st April 1999 notes:

“First of all, introduction of Driver Only Operation is not about eliminating jobs, …it is about preserving jobs. The fact is, the iron ore business is a highly competitive one, and production costs have a major bearing on positioning in the market place. Therefore, the low-cost producers have a distinct advantage in pricing and sustainability in business.

BHPIO’s major competitors in the Pilbara, namely Hamersley Iron and Robe River, operate their trains using single person operation. This represents a substantial cost benefit in this area over BHP. By implementing Driver Only Operation, BHP eliminates this competitive disadvantage.

In the words of John Hannah, Senior Vice-President and Group General Manager of BHP Iron Ore, “Reducing our cost base is imperative to our future success”.

As everyone knows, the world, and in particular our industry, is subject to constant change – as has been underlined by the sudden downturn in the Asian economies, our major markets.

Already we have seen the effects of this, as evidenced by the reduction in our railings and our inability to increase sales in YEM99. The jury is still out on just what affect the current world economic situation will have on our markets in the coming year, but we must be prepared to make adjustments to deal with changing market conditions.

Our shareholders are expecting a return on the large investments, which include -

Ÿ Nelson Point Expansion Project
Ÿ Yandi Mine expansion
Ÿ New mining equipment and railroad rolling stock
Ÿ Capacity Expansion Project, includes third dumper
Ÿ Lump Rescreening Plant upgrade (TCB2)

The excitement of rapid growth over the past few years is now being tempered by an uncertain market outlook, increasing cost pressures and greater competition from other iron suppliers.

In these times, if we are to maintain or improve on our position in the iron ore industry, we cannot rely solely on expanding our business to increase revenue from sales.

Therefore, the time has come to direct our efforts towards making the most out of the capital invested in our new projects.

At the same time, if we are to maintain or improve our competitiveness in a declining market, we must become stronger by controlling our costs and continuing previous efforts to become a more efficient producer.

In a competing market, we must have a reliable, quality driven system in place at every point in the operating chain leading to the delivery of ore to our customers.

To set new levels of efficiency, each department had been asked to develop benchmarks that compares their current performance against others in similar industries.

The reality is that customers are only interested in the price of ore landed at their steel mills and, to this extent, our objective is to reduce our overall unit costs by 20% over the short term.

Cost reductions should not be seen as a negative – it is an integral part of growing sustainable, sound business.

We are not going to compromise on safety and environmental performance and will continue to make these issues a priority.

Similar reviews are going on in all BHP centres and some areas of BHP Iron Ore (eg. Marketing, Human Resources) are participating in BHP Minerals-wide review.”
((1999) 80 WAIG 1771 at 1772)
38 Differences between the unions’ proposed awards centre on provisions being sought by the AWU and CEPU with respect to:
1. the status of union representation in attendance during the Issue Resolution Process (Clause 18);
2. the maintenance of ‘status quo’ while a matter is being progressed through the Commission under the Issue Resolution Process (Clause 18);
3. recourse to the Issue Resolution Process where an employee or groups of employees are of the view that any alteration of the Policies and Procedures under Clause 21 will have a detrimental impact on them; and
4. a requirement imposed on BHPIO to keep up to date a publication of its policies and procedures and provide a copy to each employee and the union (Clause 21 – Policies and Procedures).
39 Without in any way detracting from the detailed submissions presented by Mr Schapper and supported by Mr Llewellyn and Mr Murie, the following is a summary of some of the points put forward in support of the claim for a new award including the principles and philosophy underpinning the terms and conditions being proposed.
1. The applicant unions have taken the initiative to seek the issuance of a new award. They recognise the need for an orderly transition from the old system to the new system. With this there will be the stripping away of years of interlocking layers of industrial regulation. This will facilitate change.

2. The need to meet international competition and the demands of clients is recognised. Within this framework the unions want to preserve work for present employees and those that follow. The award addresses the fears of employees that their jobs can be contracted out en mass and that their terms and condition can be undermined by contractors.

3. The advent of WPA’s is a dramatic departure from several decades of the manner in which industrial relations have been conducted between the parties. The approach has been based on a cooperation and is reflected in long-standing registered and unregistered agreements.

4. Award protection is necessary against long term erosion of terms and conditions of employment. It protects those employees who don’t wish to submit to the control of WPA’s. It reflects a proper balance between management by employee consensus and command and control. The Award and unionism gives employees rights and obligations which are fundamental to their position within the community.

5. There are core issues which are central to the employees’ relationships with their employer and which some members of the workforce are not prepared to hand control to BHPIO. These go to:
i. Wage rates;
ii. The number of hours to be worked;
iii. The time at which work is performed;
iv. The work to be performed
a. under classification
b. contracting out;
and
v. The location at which work is to be performed (ie. No unilateral transfers between sites).

6. The award recognises and accommodates the contribution these employees have made to the prosperity of the company. Properly used the award will make a massive contribution to productivity. It will reflect the status of award employees in their contribution to BHPIO just as those who have taken up WPA’s are recognised.

7. The award has been developed in conjunction with members. It has been scrutinised and has been subjected to a process of endorsement.

8. The wage fixing principles contemplate that the application may be heard and determined on its merits. There is nothing in the principles which prevent it from determining the matter on the basis of equity, good conscience and substantial merit in accordance with Section 26 of the Act. The application meets the requirements of Principle 10 ((2001) 81 WAIG 1721).
40 Particulars of Unions’ Claims
Remuneration

The unions seek a wage outcome of 25% on rates paid under EBA 3. This increase also applies to allowances. It is stated that it is not an ambit claim and nor is it claimed to be unreasonable.

The other element of the increase is for superannuation contributions to be increased from 8% to 14% of wage rates. This it is said would bring BHPIO award employees into line with the benefit other employees throughout the BHP conglomerate enjoy.

Justification for the increase of 25% in wage rates is based on the following factors:
1. CPI movements since September 1999 quarter to March 2001 have been 6.3%. EBA 3 expired in November 1999. There have not been any wage increases subsequent to the expiry of that agreement. It is recognised that the 6.3% movement takes into account the impact of the GST.

2. General outcomes from EBA increases in the community have been in the range of 3.5% to 4.4% per annum in 1999 and 2000.

3. WPA’s have been granted very substantial pay increases from November 1999.

4. Since November 1999 there have been substantial increases in productivity at BHPIO. This has continued since 1999 albeit not at the same rate (refer to Publication ‘BHP Iron Ore Chronicle’ January 1997 to May 2001 and ‘Chronicle Summary’). It is submitted that EBA employees made a significant contribution to this increased output and efficiency. Any claim that productivity improvement is solely attributable to WPA employees is rejected (refer to memo from Graeme Hunt to all employees: “Outstanding Results for 2001” Exhibit A9).

5. A substantial wage increase is justified given the magnitude of change inherent in the award. The dramatic departure from the way industrial relations has been conducted in the past will “yield massive increases beyond those now possible”.
41 In promoting their claim the unions cited the fact that the determination of wage increases is not a “scientific or arithmetic process”. The history of wage adjustments under EBA 2 (two increases of 5% p.a.) and EBA 3 (two increases of 5% p.a.) shows that the claim is within reasonable bounds for the operation. The unions also claim that despite the anomaly within the term of the proposed award, the wage increases being sought would effectively apply for three years. This takes into account that EBA 3 expired in November 1999 and that there could be no further claim until December 2002.
42 While disclaiming that the wage adjustment seeks parity with increases accorded WPA employees, the unions note the magnitude of salary increases under those arrangements (refer to Exhibits R12 and R13). It was pointed out that in addition to the initial increase on taking up a WPA in November 1999, individuals received the pay out of accrued sick leave entitlements and subsequent adjustment in 2000 and 2001 under the general salary review for BHPIO staff appointees and the Iron Ore Incentive Program (“IOIP”).
43 In the course of proceedings Mr Schapper made application for retrospectivity to be granted to the unions’ claim. It was noted that those taking up WPA’s in November 1999 received three months retrospectivity. The claim for retrospectivity to the date of application (ie. 2nd April 2001) is based on special circumstances. These are that BHPIO refused to negotiate an EBA from at least November 1999 to June 2000 and that similar consideration was given to those entering into WPA’s.
44 As to the financial impact of the claim attention was drawn to the ‘BHP Investor Relations Investment Briefing Paper – November 1999. Changes in Employment Arrangements – BHP Iron Ore’. The advice notes in the circumstances of approximately one thousand of its award based employees moving to staff employment contracts (ie. WPA’s) then:

“It is expected that total salary costs will be in the order of A$10 million on a 100% take-up basis. The higher indicative annual salary costs are less than 1% of cash costs per tonne of iron ore produced and will be significantly more than offset by productivity gains. In addition accrued sick leave entitlements will be cashed out as a one off expected cost of A$10 million (provision for these costs has already been made)”.
(Exhibit A2)
45 Use of Contractors
Restrictions imposed on BHPIO in the use of contractors has a history going back to before 1984. The Award provision has been significantly modified by the operation of EBA’s, IR Agreements and the BEP. Specific provisions applied to the company’s various operations (Refer to EBA2 dated 25th November 1995). Reference was made to “core” and “non core” duties and provisions, for manning levels, job protection and the offer of overtime when contractors were used. Concessions agreed to by the unions under the BEP and 1999 Industrial Relations Agreement on the use of contractors was at the time recognised to have been on an interim basis pending negotiation of EBA4. Now that that has not eventuated, the Unions seek to establish a position to increase restrictions on the use of contractors. This position is taken because of the fear that the Newman Mining operation could be contracted out and everyone made redundant. This together with the introduction of workplace agreements gives rise to fears of job security.
46 The unions accept the complexity of BHPIO’s operation and the fact that the company cannot retain all the expertise on staff makes the use of contractors imperative. There are long standing arrangements and acceptance that contractors should be used in emergencies and on particular work. However as far as the unions are concerned “enough is enough”. It is not that the unions are seeking to prevent the use of contractors; it is claimed that they want to preserve the work currently being performed by BHPIO employees. The use of contractors holds out the potential to completely eliminate award employment.
47 It is said that attempts to draft a provision which adequately addresses complex situations for the use of contractors while preserving the skills and jobs of their members has, in the union’s experience been fraught with difficulty. The number of disputes before Kenner C over the use of contractors and the application of industrial relations agreements and EBA’s to particular circumstances attest to this (see Commission Exhibit ‘BHP Commission Matters’). Mr Schapper submitted:
“What we have attempted to do subject to those inherent limitations in our clause 25 - - the first paragraph really mirrors existing provisions except there’s a requirement to give the detailed reasons for considering the use of contractors. The provision of information of course in line with the authorities that I referred to yesterday about consultation in the work-force - - the provision of information is essential where one seeks to get one’s work-force on side. To get the work-force on side other than by use of the big stick requires that the work-force be informed of what decisions are being made and why they are being made. There’s then a provision which says:

“Where BHP decides to engage contractors it shall immediately give the unions at least 4 weeks’ written notice of those matters.”

Again that is much along the lines of existing clauses except I’ve added 6, the detailed reasons why direct employees of BHP are not to carry out the work, and then I have said, and this is the major provision:

“Unless each of the unions give their prior consent in writing, BHP shall not engage contractors to perform any work which at the date of the making of the application for this award was ordinarily or usually or largely carried out by persons employed directly by BHP provided that consent shall not be unreasonably withheld.”

Now, what we are saying in that clause is enough is enough. The permanent work-force and the work that it performs has been cut to the bone and it should go, in our respectful submission, no further. Now, BHP’s witness statements depict our claim as something that will completely destroy its business. They depict our claim as if it would prevent the completely uncontroversial use of contractors that has occurred for many years in the operation, and it doesn’t. There is a misapprehension on the part of BHP as to what we seek to do is to preserve that work which is currently carried out by BHP direct employees to those employees in the future, given the extent of contracting out that we have seen in the review of the documents that I have made.

There’s then a revival of the clause “No employee shall be made redundant as a result of the use of contractors and no employee to whom this award applies shall suffer detrimental - - any detrimental effect in respect of their earnings, job security or available reasonable hours of overtime by reason of the employment of contractors”, which are similar to existing provisions in the clause 29 or the various agreements.”

48 It is insufficient in the unions’ view (Transcript pages 92 and 93) to cite the adequacy of redundancy payments as a retort to the call for job security. They say that argument is too narrow and mistakes or misunderstands the nature of unionism. The present employees owe their advantageous terms and conditions of employment not only to their own efforts but also those who came before them at BHPIO. Employment and the terms and conditions under which work is performed should be available to those that follow. Contracting out has the potential to completely eliminate award employment.
49 The unions believe that the terms of their proposed clause can accommodate demands for contractors under arrangements that presently exist. To assist in meeting demands provision is proposed for casual, part-time and fixed term employment under the proposed award.
50 As to the question of consultation with the workforce over the proposed use of contractors, the unions consider that it is difficult if not impossible to set down in an entirely clear way the manner and mode of consultation. However an aggressive exclusion of employees from the consultative process is a “lose – lose situation.”
51 To address the complexities of situations involving the use of contractors, the unions have said that “if at the date that this application was made to this Commission work was ordinarily done by employees at BHP it shall continue to be so unless the unions consent otherwise.”
52 In support of the claim copies of ‘Use of Contractors’ provisions from other mining awards were tendered (see Exhibit A8).
53 Change of Location Clause 20
This is a “core” matter and is therefore excluded from matters over which BHPIO has “unilateral control.” While BHPIO may require an employee to transfer that is subject to the consent of the employee.
54 Housing Policy – Under Termination (Clause 15)
The conditions which the Unions seek to include are those which applied when voluntary redundancies were effected in 1999.
55 Implementing Change
In many respects the unions see the provision in Clause 21 – Policies and Procedures and Clause 26 – Transitional as the centrepiece of their award proposal. These provisions read together give BHPIO “unilateral power” to implement change, to extricate itself from the interlocking, intermeshing and interdependent labyrinth of industrial regulations. This ability is qualified only with respect to those “core” matters which cannot be varied other than by way of award amendment and the requirement that BHPIO gives 6 weeks’ notice of its intention to vary, change, abolish or replace some existing practice or procedure.
56 While on the face of it Clause 21 – Policies and Procedures and Clause 26 – Transitional catches every policy and procedure in BHPIO’s operation from safety to administrative requirements it is intended to cover those policies and procedures relevant only to the particular interests of individuals as employees of BHPIO.
57 Just so that it is not misunderstood, while the requirement to give 6 weeks’ written notice of each proposed variation, addition or deletion imparts no other duty on BHPIO, the unions’ make it clear that passive acceptance cannot be assumed. This it is said characterises the difference between those on WPA’s and award employees. The latter retains the right to object, discuss and if need be take matters to the Commission. Nevertheless the power vested in BHPIO to initiate change in all but “core” activities is claimed to be absolute. It is intended to place BHPIO in the unique position of being able to introduce flexibilities not previously considered. Overtime could be made compulsory but shift arrangements remain a “core” condition. Working hours in rail could not be extended beyond the 42 hours or 45 hours to 50 hours without seeking a wage claim.
58 Notwithstanding the terms of Clauses 21 and 26 the provision for the continuing application of the 1999 IR Agreement (or as it is referred to in the proposed Award, the Industrial Relations Agreement (1997 as amended) under the Issue Resolution Process (Clause 18) introduces a complexity or complication to the operation of Clauses 21 and 26. This IR Agreement is claimed by the unions to currently apply through the application of EBA 3 and the B.E.P. Nothing in Clauses 21 or 26 could operate to cancel that agreement for 12 months.
59 The AWU and CEPU also seek, separately from the claim of the other unions, the continuing application of a status quo provision. This has implications for the operation of Clauses 21 and 26.
60 Hours of Work
The terms set out in Clause 8 of the proposed award reflect the principle that hours of work are a “core” matter and cannot be unilaterally changed. The unions submitted that hours are another aspect of the price of labour. There is no difference between increasing the number of hours of work and leaving the price the same and leaving the hours the same and cutting the price. Hours of work, it was pointed out dictates to a large extent an employee’s family life, his/her social activities and his/her intellectual and educational pursuits.
61 The unions’ claim in Clause 8 is that each employee shall work a 40, 42, 44, 48 or 50 hour week in accordance with the current rostered hours set in the department and the ordinary hours may only be altered with the agreement of the majority of employees under the award working in the department. Likewise shift changes should not be made without the consent of the majority of employees.
62 Employee Classification and Duties
This is considered to be a “core” issue by the unions. Although the classifications set out in Clause 7 – Wages have been taken from EBA 3 and do not relate to any other provision in the proposed award, the unions consider that the classification structure should be included in the award by way of a particular provision or by the operation of policy pursuant to Clauses 21 and 26 of the union proposed award. It is accepted by the unions that there needs to be “a reasonably flexible classification structure”. (In the course of proceedings BHPIO submitted a copy of “Schedule 3 – Award Classification”. This is being checked by the unions).
63 The unions accept that rigid classifications have been broken down and that generally employees may be required to work within their competence subject only to safe working conditions. This has long been a feature of employment at BHPIO. The terms of Clause 6 is that:-
“Provided however that each employee shall be entitled to be employed primarily on the work for which that employee was last employed on the making of this award is trained, competent and work experienced”.

is not intended as a major shift from the current position. The concern is that employees may be employed in lesser duties than they might otherwise be employed on.
64 The following matters were the subject of written submission by the Unions during the course of proceedings. Claims on these “secondary” matters are set out hereunder.
65 Choice – Clause 22 – Offer of Employment
It is current BHPIO policy to only employ new employees on the WPA and this policy in fact is applied. Such a policy is susceptible to the jurisdiction of the Commission: RGC Mineral Sands Ltd v CMETU and Others 80 WAIG 2437. By offering employment only on the WPA, BHPIO deprives new employees of the prospect of being employed under the award. The prime purpose of the award is to set down employee rights and entitlements. The award is made for the protection of employees. For example, the employee’s salary is set out in the award and is not variable at BHPIO’s instance. Under the WPA, BHPIO can unilaterally vary employees’ salaries. Similar situations (euphemistically called “flexibilities”) arise in relation to all the other areas of critical importance to employees such as hours of work, shift arrangements, classification and location of work.

Clearly it is employee rights which are most significantly affected by the EBA/WPA choice.

Since it is the employee’s rights which are affected, it is the employee who should have the choice as to which is to apply. The question of whether the employee will trade off the award protections for the WPA dollars is a question which, under the current policy, is being answered for the employee by BHPIO. This is clearly unfair. Further, existing employees had the right to choose between the EBA and the WPA. There is no reason why new employees should not have the same right.

66 Productivity Bonus – Clause 7 - Wages
A productivity bonus was introduced as part of restructuring in 1990 (70 WAIG 4437).

It was extended to staff employees. The scheme was adjusted from time to time. Payment was last made under the scheme in May 1999. Formal notice of withdrawal from the scheme was given in November 2000. The “trade offs” were not rescinded.

In addition to the annual overall salary review WPA employees receive an annual bonus under the IOIP. The target amount of the bonus is 7.5% each year of defined salary. It is not an increase but an annual payment.

The bonus is calculated by reference to company performance and departmental performance. It is allocated according to BHPIO’s assessment of each WPA individual’s performance.

Award employees have contributed significantly to the overall success of BHPIO (see Exhibit UM8 being Harris email of 2 July 2000 “a bloody good effort from all…” “thanks to all employees” and then concluding with the Hunt memo of 1 May 2001 “everyone is to be congratulated”. See also Chronicle April 2000 p2 “a credit to you all”; June 2000 p2 “a credit to all employees”; July 2000 p1 “a credit to all employees”; October 2000 p4 “a credit to all employees” and Feb 2001 p4 “acknowledge the commitment of EBA employees”).

These remarks properly recognise that in a complex and integrated operation such as BHPIO the company’s output is, at least, as much to do with co-operative teamwork as it is with individual effort. Increased overall productivity is therefore to the EBA employees’ credit as least as much as it may be to the credit of the WPA employees. The BHP charter/policy is at Exhibit 2. At page 11 BHPIO commits to freedom of association for employees. At page 19 BHPIO commits to rewarding employees for performance. But BHPIO is not performance rewarding those employees who have chosen to maintain an adherence to the collective approach – as freedom of association permits them to do. BHPIO is therefore in breach of its own charter. It follows from the above that the unions’ claim for a performance related payment ought succeed. That claim excludes the individual review aspect of the WPA incentive scheme. As each department’s allocated incentive amount is divided up between WPA employees according to their respective individual reviews the Commission may need to make an adjustment to cater for the fact that EBA employees are not to participate in the individual review process. This might be done by simply requiring the budgeted amount per employee (being the “meets expectations: amount) to be allocated to each award employee.

67 Superannuation – Clause 17
This claim is for an increase in contribution from 8% to 14%. This is justified on the same basis as the 25% pay claim as superannuation is simply remuneration paid to a fund instead of direct to the employee.

This is an important claim because of the beneficial tax treatment of superannuation contributions. That treatment effectively increases the net benefit to the employee beyond that which flows from an equivalent gross wage increase.

As the BHP Provident Fund is a defined benefit fund there will need to be discussions between the parties as to treatment to be given to such additional payment as the Commission may order.

68 Union Rights – Clause 23 – Union Representation

Right of entry

The current provision of the award is Clause 28 – Union Officials which gives a right of entry to a “duly accredited full-time official”. The unions’ claim is for any “accredited union representative” to have right of entry.

The purpose of this change is to recognise that unions, like other entities in the community, operate through a variety of agents and representatives not necessarily limited to full time officials: see Wood statement at UM12 at paragraphs 6-8. To limit right of entry to full time officials is to impose an unjustifiable inflexibility on the union parties to the award inconsistent with modern ways of conducting business.

69 Leave for stewards etc
The current IR Agreement (JMS6) provides:
· Paid leave, subject to release, for stewards and convenors to attend to the matters listed in paragraph 2 of 5.0 Site Union representatives’ Performance of Duties p8. See also 9.0 Industrial Time at p12.
· Paid leave, subject to approval, for stewards and employees to attend the meetings list in 6.0 Meetings at p9.

Further, the DOO agreement (JMS5) provides for detailed union leave provisions at 6.20 Agreement on How We Do Business at 80 WAIG 1792.

Provisions of this type have existed at BHPIO by agreement for a least a quarter of a century: see 55 WAIG 1617.

BHPIO carries the onus of justifying a change to a longstanding custom or practice: see 67 WAIG 763 at 766. No such justification has been advanced.

Further, in view of the fact that BHPIO does not want to employ any person on the award/EBA and prefers WPA employment it is likely that BHPIO, in the pursuit of its industrial objectives, may take unfair action against award/EBA employees. The unfair dismissal claims of Jones and Robinson support this likelihood. Continuation of existing union rights is thereby indicated.

Paid leave was granted by the Commission in the Robe paid meetings case: see IAC decision at 67 WAIG 723.

The claim for trade union training leave is a new claim which is justified.

ASE v WAGRC 71 WAIG 1863 evidences that this form of leave has been applicable in government employment since 1986.

A slightly more limited form of leave to attend training in dispute settling procedures was granted by the AIRC in Re Metal, Engineering and Associated Industries Award PR 903193 decision of Munro J delivered 6 April 2001. See also Re Security Employees (Victoria) Award 1998 Print S4197. This form of training will facilitate dispute resolution at site level at BHPIO.

70 Continuing payment for disputed dismissals
Continuation of this longstanding benefit is essential to preserve the efficacy of the remedy of reinstatement. Mr Robinsons’ evidence demonstrates that it would be virtually impossible for most dismissed employees to remain in the Pilbara pending hearing and determination of this claim. If the Commission determines that they be reinstated it would be very difficult for the employee to return to the Pilbara with all the associated costs and dislocation to family. Cooling’s case means the Commission cannot remedy the financial loss on the determination of the claim. But the inclusion of “conditions which are to take effect after the termination of employment” in paragraph (b) of the definition of “industrial matter” renders the present claim within jurisdiction.

71 Casual Loading – Clause 24 – Casual and Term employees
The unions claim a casual loading of 25%. The current award provides for a loading of 20%. The loading for casual staff is 25%: see staff handbook, Exhibit UM4 addendum 1 p2.

Casual loading is to compensate for non-receipt of benefits such as annual leave, long service leave and the like.

Reasons why the loading should be greater than the current 20% include:

1. Long service leave at BHP is more beneficial than the standard 15 years.

2. BHP shift workers receive 5 weeks annual leave and casuals may be required to work shifts.

3. Recent cases indicate a trend to give ordinary casual workers 25%: Re Metal, Engineering an Associated Industries Award 1988 print T4991 [25%]; Queensland Council of Unions v Crown and Others No B1346 of 1999 QIRC delivered 3 April 2001 [23%].

72 Income Maintenance – Clause 8 – Hours of Work
Long term shift and classification transfers have major implications for employee remuneration. By seeking income maintenance, the unions’ claim seeks to smooth the economic effects of such transfers. The claim is similar to that which has already been applied for many years. See attachments to Connors’ statement at union materials #10; EBA II pp40-41, 79 at JMS3. See also 1.2 staff handbook #4.

73 Various Allowances – Clause 7 – Wages
The unions proposed award and the BHPIO proposed award both include the allowances set out in EBA 3. BHP have deleted the plumbers registration allowance and there is no objection from the unions as to this.

The unions’ claim includes allowances which are currently paid but not included in EBA 3. There is evidence that each of the allowances in question are currently paid: see Exhibit UM10 Connor’s statement at paragraph 10; Union Material UM9 Blyth’s statement at paragraph 9 and the attached Nelson Point Shift restructure document of November 1999; Johncock UM 20 at paragraph 46. In cross examination Stockden conceded that fairness requires that allowances which are currently paid should continue and that the only basis that they are not in BHPIO’s claim is that they are not in EBA 3.

Each of the allowances in the union claim has been increased by 25%. Historically, allowances have increased by the amount of any wage increase.

74 For the unions’ part they see that they have, through the award application, initiated a process of sweeping away 30 years of “encrustation of prescription”. It is acknowledged that in some instances the terms may have been drafted too widely. However, the intentions are clear. The proposal seeks to facilitate change and while the unions will seek to be involved the right only extends to being notified. They always retain their rights under the Act.
75 In putting forward the claim the unions expressly disavow the intent to embark on a trading process. “We are trading in everything we’ve got”. In so doing the unions maintain protection of core areas to cover wages, the number of hours worked, the time at which work is performed, the work to be performed (ie. classification and contracting out) and the location at which it is to be performed. Any other matter which impacts on the terms and conditions of employment and, significantly, the circumstances under which work is performed is a matter in respect of which notice should be given.
76 The Commission should make a decision in principle upon this matter as to whether the unions’ claim for implementing change ought be accepted or not. If it is, the unions submit that the parties should be directed to go away and draw up details as to how it is to work. In this respect, it is submitted that a member of the Commission could be available to assist in that process if there are difficulties.
77 In support of their claim the unions presented evidence from the following witnesses:

Mr R.A. Blyth: Mobile Plant Operator/Production Operator B Shift at Nelson Point.

Mr T.A. Chadwick: Motor Mechanic, Shift Maintenance Nelson Point.

Mr D.J. Connors: Control Room Operator Finucane Island.

Mr R.K. Kumeroa: Production Worker Newman.

Mr G.N. Wood: State Secretary of the CFMEU Mining and Energy Division and Vice President of the CMETU.

Mr N.J. Walton: Tradesperson ME Workshop Newman.

Mr D.J. Stead: Mechanical Tradesperson Field Maintenance Newman.

Mr N. Kalic: Mine Worker, Production Area, Nelson Point.

Mr D. Pike: Electrician Finucane Island.

Mr R.W. Powell: Engineering Tradesperson Finucane Island.

Mr G. Prvulovic: Beneficiation process Plant Operator, Finucane Island.

Mr C. Bentley: Mechanical Tradesperson Nelson Point.

Mr W.R. Johncock: Engine Driver.

Mr R. Robinson: of Cadjibut Way, South Hedland.

Mr R. Beggs: Mine Worker Newman.

Mr M.D. Llewellyn: Assistant Branch Secretary AWU.

Mr J. Murie: Assistant Secretary CEPU

78 The range of issues addressed by the witnesses included:
Ÿ involvement in industrial action
Ÿ operation of registered and unregistered agreements in the workplace
Ÿ resentment over pay differentials with WPA’s
Ÿ the operation of the status quo
Ÿ their understanding of the proposed award
Ÿ the implementation of transitional arrangements and prospects for change
Ÿ the use of contractors and the availability of overtime
Ÿ redundancies
79 For the AWU, Mr Llewellyn pressed the Commission to adopt its claim for the status quo to operate in relation to a dispute once it is notified to the Commission. It would thus not be necessary for the union to separately seek a stay of operation via the Commission. It pointed to what it described as a deterioration of the relationship between the unions and BHPIO over the last 18 months to two years as measured by the number of matters taken to the Commission. He also made separate submissions in relation to the contractor / overtime linkages, the operation of the bonus and superannuation.
80 For the CEPU, Mr Murie similarly pressed for the maintenance of the status quo after the operation of the first 12 months of the unions’ claims. In the CEPU’s position, status quo would operate upon the making of an application to the Commission. He also urges the Commission to insert a provision obliging BHPIO to continue for at least a further 6 months of employment the employment of persons who have completed their apprenticeship. (He notes the evidence of Mr Stockden that it is BHPIO’s present intention to continue the practice.)
81 Mr Dixon on behalf of BHPIO made comprehensive submissions in support of the BHPIO proposed award. In doing so he addressed some background issues and the approach that the Commission should adopt in considering the competing claims before it.
· It is common ground that the 1984 Award and all formal and informal agreements should be rescinded or cancelled. With registered industrial agreements there are no residual obligations on cancellation under s.41(7) of the Act. As BHPIO could retire from such agreements, that right should not be qualified by the operation of the new award.

In this respect the Commission should exercise its power to cancel the Order in matter C 60 of 2001 which continues to bind BHPIO to the terms and conditions of the 1997 Industrial Relations Agreement (as amended) (2001 WAIRC 02341).

· The Commission has comprehensive powers to deal with industrial matters. It should not seek to deal with every eventuality in the new award.

· BHPIO should be put in the same position as other employers. The level of award prescription should be commensurate with industry generally.

A 30 year history of industrial relations agreements and informal arrangements should not prejudice BHPIO and provide the basis for more protection for award employees than is available to them under rights established pursuant to the Act.

· BHPIO accepts that some employees want to work under the protection of the award system.

· The prosperity of BHPIO is in the employees’ long term interests. Inefficiencies prejudice the long term viability of the company.

· It is not BHPIO’s position that “WPA are better than award employees”. However, they do have a different attitude. They are more productive, more flexible and more amenable to change. There is not the requirement for them to test every initiative for permissibility against the terms of a formal or informal agreement. They accept the concept of a “whole of job” approach to their work. It is wrong to say that they give up any right to object. They are free to cancel the WPA.

Exhibit R14 details examples of flexibilities and efficiencies under the system of WPA’s.

· BHPIO rejects the assertion that it benchmarks performance against Rio Tinto.

· Reductions in costs since 1998 are essentially attributable to two factors; first capital investments and second the greater proportion of lower cost Yandi ore being produced and shipped.

Evidence submitted by the unions (exhibit 5 “Welcome to BHPIO”) illustrates that the environment in which WPA employees operate is enhancing efficiency and productivity.

· Industrial Agreements failed to deliver to BHPIO the benefits it had bargained for. These agreements failed to comprehensively secure reliability of supply, an orderly process for dispute resolution and no forms of industrial action before, during and after the settlement of an industrial issue. However, BHPIO was required to maintain status quo during the resolution of a matter, payment to dismissed employees until matters before the Commission were finalised and time for union representatives to attend to union matters.

Status Quo has not contributed to the speedy resolution of matter. It operates to usurp the role of the Commission.

· In respect to the genuineness of this pay claim BHPIO draws the Commission’s attention to the fact that in the certified agreement which is being pursued by the unions there is a 15% claim over the term of the agreement and a redundancy claim for 2 weeks for each year of service. It is for 3 weeks for each year of service under the new award.

· Consistent with the wage fixing principles the new award should be limited to a Safety Net Award.

If one compares BHPIO’s proposed award to awards prescribed generally by the Commission for industry then it need not be concerned about ongoing issues which the unions might pursue at the federal level. If the unions continue to pursue their certified agreement, which on all the evidence is most probable, BHPIO will defend itself within the statutory scheme available to it. In the meantime, its award will permit it to carry on in a reasonably efficient manner without the “amazing level of restriction” which the unions’ claims would impose on it.

82 The origins of clauses in the BHPIO proposed award are set out in Exhibit R5.
83 In summary, the BHPIO proposed counter-claim award contains the following provisions:
· The term of the award is 12 months.

· The provision for recission of all previous awards and agreements specified in the documents concerned.

· Transfer from one level to another is with the employee’s consent and with one week’s notice (Clause 6.1).

· The Contract of Employment provision reflects the requirement to work a reasonable amount of overtime. Provision for casual, short-term and part time employment have their source in an EBA.

· The wage rates proposed pick up existing rates under EBA 3 with a 5% increase.

The increase in the aggregate wage proposed under the award was calculated on the basis of the Perth CPI increase, adjusted to take out the effects of GST for the period between the December quarter 1999 to the March quarter 2001. This equates to 2.7%. A further 2.3% was then added to take into account the term of the proposed award.

· Hours of work provisions must be read with the schedule which refers to hours worked on which employees are working particular shift panels or not. Overtime payments are calculated in accordance with the specifed rates under the schedule. This reflects the proposed wage movement.

· Hours of duty for shift work arrangements reflect the current award but do not include the obligation to consult. If a change is rendered unfair because there was not consultation, the matter can be reviewed at a later stage.

The right to change the roster is not subject to veto. The protection under the existing award for changing shifts on less than 48 hours’ notice is reflected in the proposed award (Clause 9.7).

· Annual leave travel assistance comes from the existing award and EBA 3 entitlement.

· Sick leave entitlement of 80 hours for each year of service reflects the Minimum Conditions of Employment Act.

· Proposed redundancy provisions reflect the terms of the existing award as modified in 1991 and which applied when the Voluntary Redundancy Programme was implemented in March 1999. It stands at 2 months’ wages plus 2 weeks’ wages for every completed year of service. The unions’ claim is for 3 weeks’ wages for each completed year of service.

· BHPIO contribution to the Employees Provident Fund remains at 8%.

· The Issue Resolution Process under Clause 21 of the proposed award is in line with the provision the Commission inserted into awards under the Labour Relations Legislation Amendment Act.

· The classification structure will be subject to consideration by the unions. It should be applied on the major and substantial test.
84 In addressing the provisions to be inserted in the new award. BHPIO rejects the notion that it carries the onus for establishing change. What is presently in place may not be meritorious and to perpetuate those provisions would be contrary to Section 26 of the Act.
85 BHPIO submits that the proposed counter-claim award addresses “fundamental” or “core” issues identified by the unions. In summary, there is no need for protection in the use of contractors. The wage increase is appropriate and ordinary hours are protected. There is no unilateral power to vary arrangements. Shift roster provisions are consistent with the existing award. The classification structure will be inserted into the award. There is protection against relocation to another site.
86 Furthermore, BHPIO submits that there is no equity in the unions’ claim. The unions should be tested against the terms of the IR Agreement. The legal effect of the proposed transitional provisions under the Clause 26 makes policies and practices enforceable as award provisions. It enables award variations to progress without reference the Commission to assess the intention, effect or enforceability. The arrangement does not satisfy the terms of section 26 with respect to its productivity outcome. The concept with the proposed Clause 21 – Policies and Procedures, is said by BHPIO to represent a mechanism for change that is unworkable. The inescapable conclusion is that change will only occur if the unions agree.
87 On limiting the use of contractors, it should be recognised that they are an integral and beneficial part of BHPIO business. BHPIO will continue to use contractors, with the nature of operations requiring the reassessment of contractor’s usage from time to time. There is no evidence of loss of skill in the workforce through the use of contractors. Where redundancies have occurred employees have been retrained and treated fairly. The unions’ claim in this respect is unworkable. The Commission should not interfere with running the operation. The limitation on the use of contractors merely serves to ensure the availability of overtime.
88 BHPIO submits that the claim for a 25% increase in wage rates is unjustified. The magnitude of the claim fails to appreciate material differences between the way WPA employees and those covered by the EBA are working. The award is not the final claim and it will not settle matters between the parties.
89 With respect to the provisions for union representation, the benefit being extended to those employees by virtue of union membership is contrary to s96B of the Act. As to the claim for choice under Clause 22. – Offer of employment, BHPIO notes that this may necessitate intervention on the grounds of inconsistency.
90 On other matters the subject of claim by the unions, BHPIO noted the following:
1. The claim for retrospectivity

This was not included when the claim for the new award was lodged. There has been no evidence to support the claim and BHPIO did not have an opportunity to cross examine witnesses on issues going to its merit. It was noted that the unions are still pursuing a Federal certified agreement.

2. Employees classifications and duties

On the application of the proposed award, the company could in effect alter the rates of pay in real terms by altering the classification structure.

In other respects the proposed clause is restrictive. By limiting work to that which an employee was primarily employed when the award is made, the provision cuts across the terms of the contract of employment.

3. On the claim for changes to travel assistance on annual leave, BHPIO pointed out that there was no evidence of any difficulty with existing provisions or practice.

4. Changes claimed for the long service leave entitlement are unsupported by evidence.

5. In relation to the unions’ proposed provisions for sick leave (Clause 12) and other leave (Clause 14) it is submitted that the company’s provisions (Clauses 15 – 17) are preferable.

The evidence presented through Mr Stockden claims a high level of absenteeism for EBA employees. One way of managing this is through the requirement to provide doctors’ certificates. By the provision of appropriate medical certification by employees this issue will be properly managed.

6. On the claim for additional provision of protective clothing for casuals, BHPIO pointed out that there was no evidence lead to support the change.

7. Clause 24 of the union’s claim deals with an increase for the casuals’ rate. It is proposed to move from 20% to 25%. There are restrictions imposed on the use of casuals. There was no evidence lead on these matters and BHPIO pointed out that the increased loading would effectively set a new standard in the Commission.

8. Under Clause 28 union representatives are entitled to meet and have discussions with apprentices as a group once a month. BHPIO objects to this provision on the basis that there was no evidence to justify the entitlement in that form and offends the freedom of association.
91 In support of its claim, BHPIO presented evidence from the following witnesses:
Mr J.M. Stockden: Vice President Human Resources BHPIO

Mr D.J. Miller: Vice President Operations BHPIO

Mr A. Holland: Supervisor Train Crew Development

Mr P.W. Priestley: Superintendent Maintenance Finucane Island

Mr M.B. Campbell: Superintendent Production Finucane Island

Mr D.W. Daines: Manager Ore Processing Newman

Mr C.T. Dunbar: Mine Services Coordinator Newman

Mr J.R. Harris: Manager Maintenance Finucane Island

Mr B. Hickling: Supervisor A Shift Nelson Point

Mr G.A. Offereins: Manager Track and Signalling

Mr R.F. Donnelly: Manager Rolling Stock and Vehicle
Maintenance Port Hedland

Mr G.A. Knuckey: Manager Mine Maintenance Newman
92 BHPIO’s witnesses addressed the history of workplace developments, matters going to the operational requirements at present and under each of the proposed new awards and the management of two groups within the workforce. Other matters included:
Ÿ efficiencies and flexibilities resulting from the introduction of WPA’s
Ÿ the limitations associated with employment under EBA’s and formal and informal agreements
Ÿ business objectives and departmental plans
Ÿ the planning process and the use of contractors
Ÿ industrial action
Ÿ the 1999 Redundancy Programme
93 Conclusion
As counsel for the respective parties reiterated, the case presented is in two major parts:
(a) the level and form of award prescription to be imposed on BHPIO in carrying on its business. This includes the administrative burden entailed in meeting any obligation; and
(b) the level of wage rates the new award should attract.
These two elements are directly related.
94 Under the ‘Statement of Principles – June 2001’, the Role of Arbitration and the Award Safety Net Principle states:

“Existing wages and conditions in awards and relevant agreements of the Commission constitute the safety net which protects employees who may be unable to reach an industrial agreement.”
((2001) 80 WAIG 1721 at 1722)
95 The Commission is to apply the State Wage Principles. We consider that Principle 10 is satisfied by the material before us. Accordingly, no other principle is applicable and in that regard we agree with the submissions of Mr Schapper and AMMA to that effect.
96 There is tension between establishing an Award Safety Net which assumes existing award conditions and those in relevant agreements and the requirements of Principle 10 (‘Making or Varying an Award or Issuing an Order which has the effect of varying conditions above or below the safety net). The objective must be to establish terms and conditions consistent with demands for structural efficiency and productivity based outcomes.
97 All parties have pressed for significant changes not all of which rely on existing award conditions and relevant agreements. Indeed to rely on existing award conditions and relevant agreements would, it is argued, be contrary to Section 26 of the Act as some existing conditions may lack merit. The unions in particular concede that the current regime operates to BHPIO’s disadvantage. The necessity for flexibility is recognised.
98 The age of the award and the limited reliance placed on it for a considerable time together with the advent of a series of interlocking EBA’s registered and informal agreements, some of which also date back a considerable period of time, do not necessarily reflect several decades of structural efficiency under the award fixing system to which other employers and employees have been subjected.
99 The respective approaches taken by the parties reflects an acceptance that much of the formal and informal regulation under which they have operated by agreement and which the parties themselves considered fair only 2 years ago, is now outmoded. This acceptance facilitates the establishment of an award free from the successive layers of negotiated working conditions and one which meets the present requirements of the industry while protecting the legitimate interests of employees.
100 The circumstances of these applications presents a unique opportunity to set down a new foundation upon which industrial relationships can be conducted. This means a break with 30 years of tradition and practices. We consider that the greater the difference in the systems of work the greater the likelihood of future disruption. There is some suggestion in the evidence that EBA employees have noticed a change in attitude towards them by some BHPIO staff. The potential of disruption in the workplace by the operation of two regimes gives no warrant for any change in attitude on the part of BHPIO. Employees are free to remain under the award and EBA structure.
101 We have had regard for the provisions of Section 26A of the Act. We are satisfied that we have not received in evidence, or informed ourselves, of any workplace agreement or any provision of a workplace agreement. Rather, the conditions of employment of those employees of BHPIO who are parties to the WPA are not contained within the workplace agreement. The conditions of employment are contained in the letters and other documents separate from the workplace agreement. We agree with the submission that Section 26A is to be read strictly and accordingly believe we are not prohibited by Section 26A from having regard for the conditions of employment of WPA employees to which all parties referred us. Indeed, the essence of the issue before the Commission arises from the fact that 50% of the workforce is under the regime of the WPA whilst the remainder work under the regime of the award, EBA, registered and unregistered agreements.
102 The unions’ objective of facilitating an orderly transition from the old system through their proposed mechanisms in their Clauses 21 and 26 is an acceptance by them that dramatic changes need to be made to meet operational requirements.
103 However from all of the evidence and the acknowledged difficulty in drafting the provisions we doubt whether the mechanisms can work in the form proposed. We consider there is evidence to support a conclusion that the unions’ claims for “consultation” over the introduction of change is for the purpose of either delay or for negotiating further concessions. In that context, “consultation” seems pointless. Without a catalyst to break links with the past we consider that it is likely that there will be recourse to the same approaches for dealing with change that has characterised the relationship in the past.
104 We realise that a change in culture will not happen overnight. The new award must facilitate it. We consider that BHPIO’s employees are equally prepared to contribute to BHPIO’s future whether they are covered by the EBA or a WPA. The differences between them arise from the differences in their industrial regulation. The environment must be established whereby attitudes that reflect a commitment to business objectives are fostered. However that does not mean that we accept the award proposed by BHPIO in its entirety.
105 The history of wage fixation has evolved over one and a half decades. It has moved from addressing the need to remove restrictive work practices in awards and inserting facilitative provisions and structural efficiency clauses to meet the needs of industry, to the negotiation of enterprise specific agreements to address the particular demands and productivity requirements of individual workplaces.
106 Since the mid-1980’s enterprise bargaining has been the focus of the industrial relationship at BHPIO’s operations. With the failure to continue that process the spotlight returns to the award.
107 The enterprise specific award must fulfil the dual requirements of protecting employees as a safety net and providing the employer with a structurally efficient framework within which efficiencies and productivity improvements can be pursued.
108 It should reflect the developments under the process of structural reform that has been going on for the past fifteen years. The award cannot harbour inefficient work practices in the expectation that at some time in the future those matters may be addressed under another EBA.
109 The wage fixing principles now recognises the particular nature of an enterprise specific award. Where agreement can be reached between parties the award can be varied under Principle 10 without recourse to the Commission in Court Session. In effect the enterprise award can be the EBA.
110 With the restoration of the primacy of the enterprise award at BHPIO, wage rates must reflect the worth of work in a structurally efficient environment free from restrictive work practices. In the enterprise award it must effectively identify what would otherwise have been specified as the commitments to efficiency and productivity outcomes under an EBA. In this respect the wage rate must be commensurate with the scope of benefits the employer can achieve in managing the structurally efficient workplace.
111 In the circumstances of BHPIO’s operation, the productivity already achieved provides the benchmark.
112 While award employment necessarily imposes some limitations in comparison with a totally unregulated environment, nevertheless the benefits in productivity outcomes and efficiencies and the ability to manage without the encumbrances inherent from the history of agreements and formal and informal arrangements, are significant.
113 The challenge is for BHPIO to manage change in the structurally reformed regulated workplace.
114 The worth of work has to a significant extent been established on what was offered to award employees to take up WPA’s.
115 The levels of efficiency, flexibility and productivity being realised presently must be the objective for those who will be employed under the award.
116 We consider that an award should issue. The level of award prescription should be minimal. It should not afford an opportunity for the successive layers of negotiated working conditions to be held on to in the expectation of further concessions.
117 It will be for BHPIO to introduce and manage the changes it needs to introduce. The changes to be made in the workplace should not be tested against limitations that go beyond the reasonableness of working within skill, competency, training and safety.
118 Our objective is to provide an environment for change together with a stable industrial relationship between the parties.
119 To achieve this we believe that:
(1) the arrangements, practices and agreements which give rise to restrictive work practices, limited efficiency, flexibility and productivity and which are now to change are to be identified.
(2) The Award and all formal agreements are to be rescinded.
(3) The Order of Kenner C continuing the operation of the 1997 IR Agreement (as amended) be cancelled.
120 Upon the provision of details of (1) above, the Commission will convene to deliver the award. This will have the effect of rescinding the Award and registered agreements. At that time the Commission will also move to cancel the Order which continues the operation of the 1997 IR Agreement (as amended).
121 The Commission will require advice from the unions as to their position(s) on the Classification Structure (Schedule) tendered by BHPIO in the course of proceedings. It is intended that the Classification Structure will be included in the Award.
122 The parties are required to consider whether or not it is appropriate to identify Key Minimum Classifications within the Structure to ensure that internal relativities are identifiable.
123 We also recognise the observation of Mr Dixon that :
“in relation to the company's award it recognises that there are a number of matters that might in the future need to be the subject of further negotiation with the unions such as hours, the length of shifts, transfer between sites, flexibilities across trades and so on. In other words, changing the classification structures to allow greater flexibility of work at a different rate of pay, whether you pay overtime for every hour worked and things like that which is the present claim. Those are matters in respect of which there is room for change and improvement.”
(transcript p. 1225)
124 In accordance with our preference at this stage to decide matters in principle, we provide to the parties the opportunity to give effect to this intention with recourse to the Commission if it is unavailing.
125 The advice from the unions on their position(s) regarding the Schedule 3 – Classifications will be required at least five working days before the Commission reconvenes.
126 We have considered at length the relative advantages and disadvantages of determining in this Decision the final form of the award to issue. The detail of the claims, the evidence of the witnesses presented by all parties and the detailed submissions presented to us make this a formidable task. We have concluded that the long history of negotiation in BHPIO suggests that the parties ought have the opportunity to tailor the wording of the clauses themselves, with recourse to the Commission, in accordance with the issues between them decided in principle.
127 Therefore, the award to issue will in principle:
(a) recognise the use of contractors as an integral part of BHPIO’s operations. The Commission will not impose a limitation on their use. There will however be provision for notification within the workplace directly involved in the use of contractors. This would seem to be an appropriate way for employees to keep informed. Notification may not necessarily be in writing but can be conveyed to those in the work area by the supervisor. Notification is to be given as soon as is practical after the decision to retain the contractors had been made. Where contractors are currently on site notification will not be necessary. An appropriate form as a guide, modified as necessary, could be that as contained in Kenner C’s recommendation in matter C 36 of 2001 (2001) 81 WAIG 915.

The Commission recognises that there may be a fear regarding the possible contracting out of what is considered to be core work and which is not currently performed by contractors but considers that this would be a “significant effect” as that is defined in Section 40 of the Minimum Conditions of Employment Act 1993. This implies a term in each employee’s contract of employment which obliges BHPIO to enter into the discussions which we would otherwise consider necessary.

(b) Retain the housing policy on termination in the same terms as was implemented by BHPIO when the voluntary redundancy programme operated in April 1999.

(c) Require BHPIO to respect and observe collective bargaining rights. BHPIO will respect union structures on each site and the rights of these structures to exist and operate. However, this will not extend to the provision of paid meetings and paid time off as of right. We appreciate the submission that draws attention to the history of such provisions in BHPIO and its predecessors. We have also considered the submissions regarding the possible effect of Section 96B(1)(a)(iv). We have had regard for the authorities to which Mr Schapper referred. In the context of the imperative recognised by all parties of the issue of productivity and that it cannot be said that paid time off to attend to union business is a provision commonly prescribed by tribunals, the claim in this particular is refused.
(d) Permit an official of a union party to this award who is credentialed in accordance with the registered rules of that union to enter the premises in accordance with the provision of Section 49AB of the Act.
(e) Contain Hours of Duty which the Commission will decide in the light of information received pursuant to the identification of all arrangements and practices to be cancelled. However, as a matter of principle, hours for which payment is made shall be worked.

(f) Prescribe wage rates increased by 14% upon the cancellation of the Award and the 1997 IR Agreement (as amended).

We propose that on the anniversary of that increase a further 6% will be payable. The Commission in Court Session is prepared to sit in 6 months’ time for the purpose of ordering that the 6% increase be paid at a date not earlier than 6 months from the date of this decision if there has been a demonstrated increase in flexibility, productivity and efficiency in accordance with our decision.

The increase shall apply to allowances. It will not be applied before the date of these reasons for decision.

We reach this conclusion in the context of the almost unique circumstances of this workplace. The long history of negotiated working conditions, the decision of 50% of the workforce to work in a different regime and the recognition of the unions and their members that the past must go compel this conclusion.

We consider that the significance of the changes which are to occur will lead to an improvement in productivity of a magnitude which amply justifies an increase of this size. We reach this conclusion with the assistance of the evidence of the increase in productivity which is stated to have occurred as a result of the change to work practices of the 50% of the workforce which moved to WPA’s. The significant reduction of differences in work practices which currently exists between the WPA’s and EBA’s as a matter of equity must lead correspondingly to a significant reduction in the differences in remuneration.

We also consider that that evidence reveals a capacity on the part of BHPIO to pay the remuneration increases proposed. There was no submission or evidence to the contrary by BHPIO and we are required by Section 26(1)(d) of the Act to have regard to the matters there set out. We are satisfied that there are no impediments imposed by Section 26(1)(d) to our proceeding in the manner contemplated by this decision. The evidence of the substantial improvement in remuneration paid to employees who no longer work in accordance with the Award and EBA regime is of itself significant.

We recognise, as do all the parties, the need for there to be a change in the culture. Without that change, the increased productivity inherent in the unions’ stated intentions of co-operating in the dramatic changes which need to be made to meet operational requirements will not eventuate. We also recognise that there is evidence to support the submission of BHPIO that there will be resistance to that change. Accordingly, the total of the wage increase we consider appropriate will be made in two stages. This will allow an opportunity for the increase in productivity to be seen.

It is important to state that BHPIO has a significant role to play in creating the environment for change to occur in a positive manner. This will be assisted in our view by BHPIO ensuring that its evidence put before us that the company does not, and will not, treat its EBA employees with any less consideration than it does its WPA’s is accepted and understood at all supervisory levels in the workplace.
(g) Prescribe a superannuation contribution that will be increased to 14%. We are of the view that the superannuation clauses as proposed by both parties are caught by the provisions of Section 49C. In each case we are of the view that in the context of Section 49C the wording in each proposed clause does more than merely note the parties’ preferred fund. We request the parties to draft the clause to be inserted in the award accordingly.
(h) Prescribe that award employees may elect individually to participate in the IOIP subject to them fulfilling all of the review requirements. If award employees are to elect to benefit from the performance payment system in operation at BHPIO, it is only appropriate and consistent with Section 26 of the Act, that they be required to bear the burden of the individual review process. This means that award employees must be prepared to accept adverse performance pay consequences if they do not meet individual performance expectations.
128 On the matter of overtime there will be a provision requiring employees to be available to perform overtime on a reasonable basis.
129 We have also had regard for the claims from the AWU and the CEPU for the current provisions to be retained obliging the status quo to be observed upon a challenge being mounted to any proposed change. However, it is evident that there are different understandings of what is meant by the “status quo” in any particular situation. This has been the subject of recent disputation between the parties. Further, we consider that there is sufficient evidence before the Commission to permit the conclusion that the operation of the status quo provision has been an impediment to the very change which the unions themselves concede now needs to occur. Accordingly, we are not of the view that the status quo should be maintained in the manner claimed by the AWU and the CEPU.
130 We consider that there is a sufficient protection against possible harsh or unfair treatment in the powers of the Commission under Section 44 of the Act in the event that circumstances warrant the making of an order obliging BHPIO to observe the status quo. We do not attempt to prescribe here the circumstances which would warrant the making of such an order. Suffice to say that orders of this kind have been made by the Commission in appropriate circumstances. It ought be apparent, however, from the context of this decision as a whole, that the making of such an order is not to be expected in the ordinary course of the changes to be introduced because we accept as sound the submissions of the unions that the current regime operates to BHPIO’s disadvantage and, by implication, to the disadvantage in the long term of the unions’ members.
131 For the same reasoning we do not consider it continues to be appropriate for dismissed employees to continue to receive their salary and other related benefits following their dismissal if the dismissal is challenged. In part we recognise that this creates an environment for a dismissal to be routinely challenged even if the challenge may be without merit. Rather, we are persuaded that whether or not dismissed employees should continue to receive their salary and other related benefits following their dismissal if the dismissal is challenged, is a matter appropriate for the Commission to assess in an individual case.
132 The claim of the unions for a clause to be inserted in the award obliging BHPIO to offer new or prospective employees employment under either the terms of the new award or the WPA at the choice of the employees is approved in principle. This Commission in Court Session is very much aware that in the absence of such a clause, the stated policy of BHPIO in preferring to engage new employees solely upon WPA’s will inevitably lead to the undermining of, and the eventual marginalisation of, award conditions as natural attrition occurs. In the context of the material before the Commission, we consider that for the award to issue to be meaningful and to provide a safety net of wages and conditions, and the right to bargain collectively, in the workplace for the future, it must be available as a matter of choice to new or prospective employees. In this regard, the Commission is extending to new or prospective employees what is effectively the same choice which has been given to current employees.
133 With respect to transfers and income maintenance, we will prescribe that BHPIO may require employees to transfer to other operations or locations. We are reluctant to approve the unions’ claims that the employee must consent. In circumstances where an intended transfer would cause genuine hardship to an employee for reason of family circumstances, we would expect BHPIO to deal with the circumstance with understanding. However, the unions’ claims may also provide an opportunity to frustrate a transfer for reasons which ultimately may be at odds with the unions’ stated intentions to improve productivity. We have concluded that the availability of access to the Commission in an individual case will be sufficient to address the concerns of the unions.
134 On the matter of redundancy benefits, the unions claim an additional week per year of service as an enhanced severance payment to employees made redundant. On the evidence there was little to justify the claim. The present prescription has been applied by BHPIO. We would need to be persuaded that the present entitlement is unreasonable and the merits are with it being improved: CMETSWU & Ors v RGC Mineral Sands Ltd (1999) 79 WAIG 27. This conclusion would not prevent a claim being made in the event of redundancies occurring. This observation does not invite an application to be made. Nor is it to be taken as a comment upon the current provisions.
135 The unions claim an increase from 20% to 25% for the casual loading. We are not persuaded that the claim has been established. A casual loading of 20% reflects the standard as it exists in this Commission. Decisions relied upon by the applicant in relation to the Federal Metal Industry Award (Print T499) and the General Ruling of the Queensland Industrial Relations Commission (Qld Govt Gazette 12 April 2001 389), were the outcome of test cases to establish new standards. It would not be appropriate, in the absence of a compelling case, to depart from the standard in this State on this occasion. Moreover, there appears to be little if any casual employment at BHPIO, on the evidence. The issue is somewhat of a moot point.
136 The term of the Award will reflect the operation of these increases.
137 Provision will be made for no further claims and ASNA shall be absorbable in the increases awarded.
138 We propose to re-convene the Commission in Court Session for the purpose of allowing the parties to report back on a date 28 days from the date of this decision. The Commission hopes this provides a sufficient period of time for the arrangements, practices and agreements which give rise to restrictive work practices, limited efficiency, flexibility and productivity and which are now to change to be identified, and for the parties to provide to the Commission the necessary information for the drafting of clauses to be inserted in the award.








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