C2758 Dec 983/98 M Print Q4464


Workplace Relations Act 1996

s.99 notifications of industrial disputes

s.170MX arbitration by Full Bench

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

(C No. 22751 of 1997)

Construction, Forestry, Mining and Energy Union

(C No. 22757 of 1997)


Curragh Queensland Mining Limited

s.170MI notices of initiation of bargaining periods

s.170MX arbitration by Full Bench

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

(C No. 20557 of 1997)

Construction, Forestry, Mining and Energy Union

(C No. 40167 of 1997)

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

(C No. 40169 of 1997)


Curragh Queensland Mining Limited

s.99 notification of industrial disputes

s.108 Reference to Full Bench

Construction, Forestry, Mining and Energy Union

(C No. 40925 of 1997)

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

(C No. 24110 of 1997)


Curragh Queensland Mining Limited

s.113 application for variation

s.108 Reference to Full Bench

Curragh Queensland Mining Limited

(C No. 30475 of 1998)



(ODN C No. 00623 of 1989)

[Print P7386 [C2758]]

Various employees

Coal industry






Arbitration under s.170MX.



This matter involves an arbitration under s.170MX of the Workplace Relations Act 1996 (the Act) and follows the termination of bargaining periods initiated by the Construction, Forestry, Mining and Energy Union (CFMEU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (collectively the unions) involving Curragh Queensland Mining Limited (CQML or the company).

The bargaining periods were terminated by Commissioner Bacon on his own initiative on 21 August 1997 [Print P4354] under s.170MW(1) after concluding that the circumstances set out in s.170MW(8)(b) existed. The Commissioner's decision followed a strike of approximately 15 weeks' duration by members of the unions at CQML's open cut mine at Blackwater in Queensland in support of various claims for inclusion in a proposed agreement.

Following the termination of the bargaining periods interim agreements were made which were to operate at the mine while conciliation was undertaken. The conciliation proceedings before Commissioner Bacon were unsuccessful and in accordance with s.170MX the matter came before this Full Bench for arbitration.

However, in correspondence dated 20 January 1998, the AMWU wrote to the Commission advising that an agreement had been reached between it and the company which had been certified on 14 January 1998 [Doc P8073 [C2812]]. The AMWU further advised that it had no further interest in the s.170MX proceedings and sought leave to withdraw.

Prior to the commencement of the present proceedings an application was made by the CFMEU for an interim award pending the determination of the matters in dispute by arbitration. The interim award application followed a 24 hour stoppage by CFMEU members in protest over a supervisor relocating a "dozer from drag line 3 to the top of ramp 5 on 22 October 1997". As a result of this stoppage CQML removed a production bonus from those employees who had participated in the 24 hour stoppage. The interim award application, among other matters, included a claim for the restoration of the production bonus scheme.

In a decision handed down on 1 December 1997 [Print P7111] we rejected the application having concluded that we were "not satisfied that an interim award ought to be made on the merits of this matter".

There are before us two award claims. CQML's claim is reflected in Exhibits C4, 4A and 4B. The claim made by the CFMEU and CEPU jointly is set out in Exhibit CFMEU29.


The Commonwealth and the State of Queensland were granted leave to intervene.


CQML operates Curragh and an open cut mine at Blackwater in the Bowen Basin in Central Queensland. CQML is a wholly owned subsidiary of ARCO Coal Australia Inc. (ARCO). CQML operates the mine on behalf of the owners, a joint venture consisting of ARCO, Mitsui Coal Development (Australia) Pty Limited and Mount Thorley Coal Operations Pty Limited (the Joint Venture).

The Curragh mine commenced operations in 1983 following an agreement reached between the Joint Venture and the Queensland Government which required the supply of 66.4 million tonnes of thermal coal to AUSTA Electric (AUSTA) over a 20 year period from Curragh coal reserves. The agreement provided for the production of steaming coal for sale to AUSTA for power generation at the Stanwell Power Station and the right to produce and export coking coal and other coal supplies. After processing at the mine site, the coal is railed to either the R.G. Tanna Coal Terminal in the Port of Gladstone, the Stanwell Power Station or the Gladstone Power Station.

The mine, in the evidence of the company, has not performed at the level expected and it regards the current return on capital invested as "unsatisfactory and unsustainable" which, for the completed calendar year of 1996, was a return of less than 2%. CQML put the major reasons for the poor performance down to the following factors:

CQML's evidence before the Commission was that it makes a loss on the sale of its coal to the Stanwell Corporation and relies upon exports to make any profit. It has estimated the remaining life of the mine is approximately 10 years based on present contractual arrangements.

The company brought forward evidence to demonstrate ongoing attempts by it since the mine commenced to improve the mine's productivity. In the company's evidence the need to improve productivity at Curragh had increased over recent years due to the difficult geographical conditions encountered and commercial issues associated with the contract with AUSTA. The failure to achieve productivity improvement was due to the attitude adopted by the unions to change. Negotiations were usually protracted and the unions regarded such negotiations as simply an opportunity to increase pay and benefits associated with matters largely ineffective to achieve real change.

In 1995, enterprise negotiations were undertaken which led to an interim agreement operating from May 1995 to September 1995 and finally a two year agreement effective from late 1995. In the company's evidence, some "nominal commitments" to improve or change work practices were contained in the agreements, however, they fell "far short of what was necessary to effectively address the continuing deterioration in the mine's financial position and likely future".

Following a study by the company in March 1996 on the various options for the future operating performance, the company commenced a series of meetings with all Curragh employees. According to the evidence of Mr Denney, Managing Director of CQML, at these meetings the company outlined the need for productivity improvement and changes to work practices in order to maintain the viability of the mine. In February 1997, the company advised employees of its decision to restructure the mine operations from July 1997 involving reducing production, operating over a five day cycle on 12 hour shifts and reducing employee numbers from 410 to 199. The reasons given by the company for the restructure were:

In March 1997, each of the unions on site notified the initiation of bargaining periods. Negotiations continued with the company identifying changes it regarded as being critical to the mine's continued operation. Following the failure of the negotiations, the unions commenced industrial action on 9 May 1997. Although originally planned for two weeks the stoppage continued for 15 weeks until the decision of Commissioner  Bacon to terminate the bargaining periods. During the 15 week stoppage, negotiations were recommenced but again failed to reach any agreement.

On 6 August 1997, CQML forwarded a letter to all unions giving four weeks' notice of the company's intention to "withdraw from all State Level and Local Agreements, whether written or otherwise, signed or unsigned, or any custom and practice" arrangements [Exhibit C6, Annexure PC12]. In August the company advised of its intention to resume production at Curragh with operations resuming late in August 1997 on a five day basis with employees working three eight hour shifts.

Following the termination of the bargaining period by Commissioner Bacon on 21 August 1997, some 16 days of conciliation took place before him, again without any agreement being reached.

On 26 September 1997, the company advised all employees that it "intended to operate under the terms and conditions of the P&E Award and that all previously observed customs, practices, arrangements, understandings or agreements, written or unwritten would cease to apply at the site". This continues to be the position at the mine.


The company called the following witnesses in support of its application:




Bruce Douglas Denney

Managing Director - CQML

Peter Comino

Manager, Human Resource Projects - ARCO Coal Australia Inc.

James Decker Humphrey

Manager, Production - CQML

Jeffrey Mark Allen

Maintenance Support Co-Ordinator - CQML

Mark Donghi

Senior Safety Advisor - Curragh Open Cut Coal Mine, Blackwater

John Heaps

Human Resources Adviser - Curragh Open Cut Coal Mine, Blackwater

Matthew Mills

Production Co-ordinator - Curragh Open Cut Mine, Blackwater

Bevan Riebel

Open-cut Operations Co-Ordinator - South Blackwater Coal Pty Ltd

Ian Hugh Coddington

Managing Director & Principal - Coddington International Pty Ltd

Robert Brenchley

Director, Vice President and General Manager of Marketing - ARCO Coal Australia

Kenneth John Foots

Chief Executive Officer - Ensham Resources

Neville Robert Norman

Academic and Consultant Economist at The University of Melbourne - Associate Professor of Economics

The CFMEU relied on the evidence of the following witnesses:




Andrew William Vickers

President of the Queensland Branch, Mining & Energy Division of the CFMEU

Raymond Clancy Coleman

President of the Curragh Lodge of the CFMEU

George Reginald Coates

National Vice President, Mining & Energy Division of the CFMEU

Bradley Bowden

Lecturer in the School of Industrial Relations, Faculty of Commerce and Management, Griffin University

Michael Buckner

Research Director, United Mine Workers of America

Shaune K G Browne

Chairman and Managing Director, AME Mineral Economics

The CEPU relied on the evidence of the following witnesses:




Richard Lawrence Williams

Assistant Secretary, CEPU, Eletrical Division, Queensland and Northern Territory Branch

Christopher James Hunter

CEPU Shop Steward at Curragh Open Cut Mine


At the present time, the terms and conditions of employment applicable to members of the CFMEU and CEPU are regulated by the Coal Mining Industry (Production & Engineering) Consolidated Award 1997 [Print P7386 [C2758]] (the P&E Award). In addition there exists an agreement made pursuant to clause 20 of that award between the company and the unions (approved by the Coal Industry Tribunal (CIT)) which amended the National Work Model and deals with rates of pay based on a skill-based classification structure together with skills accreditation, training and progression.

AMWU employees are covered by a certified agreement between the AMWU and the company. The main features of the certified agreement are as follows:

There are also a number of agreements with other production and engineering employees which are in the form of AWAs. At 23 January 1998, 21 employees had entered into AWAs which are in similar terms to the AMWU agreement. Both the AMWU agreement and the AWAs had, in CQML's submission, delivered benefits to employees and to the company by way of increased flexibility in the allocation of employees. Employees now work to their competency rather than being limited to the P&E Award work model accredited skills. The allocation of employees to rosters is now made on the basis of merit, not seniority.


The CFMEU and CEPU set out a list of conditions of employment which were said to have applied at the mine through unregistered agreements and custom and practice. There was no dispute as to their existence. As we have noted above CQML, in correspondence to the unions, advised of its withdrawal from such agreements prior to work resuming. As a consequence, a number of conditions that applied prior to the stoppage are no longer applied.

The CFMEU and CEPU, in their award application, sought to preserve a number of conditions which were identified in Exhibit CFMEU29 as follows [at 50-51]:


CQML relied upon the evidence from a range of witnesses (set out above) and various documentary evidence to support its award application. Based on this evidence, CQML submitted that the following findings should be made:

Both the CFMEU and CEPU relied on the evidence of a number of union witnesses (set out above) and evidence from CQML witnesses and documentary material to support their award application. In particular, it was submitted that the evidence demonstrates the following:


Submissions of CQML

CQML submitted that the weight to be given to the matters at issue will finally depend on the circumstances of each case. It was submitted that the Commission should adopt a "practical approach" which goes to the utility of the P&E Award rather than concentrating on past positions or claims. In CQML's submission, having regard to the matters identified in the bargaining notices filed by the CFMEU and CEPU under s.170MJ, there was ample scope for all the matters in its proposed award [Exhibit C4] to come within the terms of s.170MX(5)(a).

It was put by CQML that while the Commission must have regard to the issues during the bargaining period, such consideration would not be determinative of the outcome. It would be more "desirable" and more "useful" for the Commission to have regard to the substantial issues which "could fairly be seen as blocking the path to final resolution and the negotiations of matters of greater detail". From the company's point of view, these "substantial issues" were identified by Mr Denney in cross-examination as the following:

- contractors;

- the work model;

- 12 hour shifts;

- demarcation;

- continuity of operations; and

- seniority issues.

CQML submitted that the matters to which the Commission must have regard and should resolve in any award included the determination of the following matters:

The company concluded its submission on this point by submitting, in part, the following:

Submissions of the CFMEU

The CFMEU contend that the intention of s.170MX(5)(a) is to identify the "matters" for arbitration by reference to the "subject matters or issues" that were raised by any of the negotiating parties as matters or issues which they wished to negotiate for inclusion in a certified agreement during the bargaining period. The CFMEU submitted that there are various exhibits before the Commission which describe the matters at issue between the parties during the bargaining period and these matters are:

The CFMEU submitted that their award claim comes within the matters identified in the documents. The CFMEU further contend that Mr Denney admitted in cross-examination that certain matters in CQML's award claim were not raised or discussed during the negotiations. These matters were:

Accordingly, the CFMEU submitted that the Commission should not deal with CQML's claims on these matters.

Submissions of the CEPU

The CEPU submitted that draft proposals exchanged between the parties in April and May 1997 should be the basis for determining the matters in issue. The CEPU also submitted that the company's proposed award should not be accepted as reflecting the issues between the parties during the bargaining period as the award contains a significant number of issues not raised by the company during the bargaining period.


Submissions of CQML

The company submitted that the evidence demonstrates that "business decisions" must be made by CQML. Further it was put that important decisions currently were subjugated to an "artificial regime of compulsory consensus" which had the effect of curtailing the implementation of many changes in the manner in which work was carried out.

The evidence which disclosed an increase in productivity since the strike concluded only occurred, in CQML's submission, following the elimination of previous restrictions. The prohibition on the use of contractors, enforced demarcations and the artificial and prescriptive regime characterising "work models" are all part of a past culture which can no longer be justified. The unions' award application was one based on the adoption of previous compromises and restrictions "agreed on an industry basis in circumstances of the past and in an atmosphere and setting quite removed from the present".

The award that needs to be made by the Commission, in CQML's submission, should be one which promotes and enhances efficiency and productivity as required by the principles and objects of the Act. Based on these considerations, much of the contents of the unions' award would be rejected.

In support of its own application CQML submitted that the Commission should reject the P&E Award as an appropriate commencing point and submitted further that none of the parties sought adherence to the P&E Award. The Commission should disregard the P&E Award because it contains many provisions which are contrary to s.89A of the Act. Further, it was submitted that many of the P&E Award provisions such as sick leave, hours, annual leave, long service leave, seniority and preference after retrenchment depart significantly from Commission standards.

It was also submitted that a further reason for not adopting the P&E Award was that it was made with consent of the parties following a process of negotiations and consensus and should not be imposed on a non-consenting party. In the company's submission, the Commission should look to the arbitrated decision of the Full Bench in Re Moranbah North Coal Pty Limited [Print P7254] (Moranbah) for guidance in this matter.

In Moranbah, the Full Bench departed from the P&E Award in a number of important areas. The Full Bench approved annualised salaries, endorsed the absence of demarcation and the appropriateness of a single stream workforce and allowed for the application of principles of recruitment and promotion on merit. The findings of the Full Bench in Moranbah were all, in the CQML's submission, reflected in their award application.

CQML submitted that the Commission should not make an award which would directly or indirectly affect its certified agreement with the AMWU, an agreement reached following the unsuccessful conciliation proceedings before Commissioner Bacon.

CQML made specific submissions on the following matters which it regarded as representing the "essential matters in issue":

CQML concluded by submitting that it had made out a case that relief should be given from:

Submissions of the State of Queensland

The State of Queensland submitted that the Commission should, in determining the matters before it, recognise a "special need" at the level of the Curragh mine taking into account the company's financial and geological circumstances and the importance of the Curragh mine "to the Queensland and National economies and local and rural communities".

It submitted that there was a need to improve productivity and to introduce more flexible work practices in the Australian coal mining industry. The need for reform was particularly important given the significance of coal mining to the Queensland and national economies and the threat to the industry from an increasingly competitive international coal market.

The State of Queensland also submitted that any award made should only deal with a limited range of important matters "leaving room for further agreement at the workplace between the parties". Further, the Commission should not use the P&E Award as the starting point and the award should not contain local or State level agreements or any customs and practices. The award should provide:

Submissions of the CFMEU and CEPU

The CFMEU and CEPU submitted that their award application should be granted on the grounds that their award provides for the continued operation of a number of conditions of employment in the P&E Award which have been either long standing and/or represent industry-wide standards. These conditions include annual leave, long service leave, sick leave, accident pay and severance pay. CQML had not presented any evidence to justify narrowing these provisions from the award or reducing them.

The Commission should not remove or reduce these conditions of employment in circumstances where CQML's difficulties are due to factors such as the AUSTA contract and geological problems and CQML still makes a profit. Further, the evidence demonstrates that labour costs are below the industry average and productivity above the industry average.

It was further submitted that the unions' award contains variations to existing award clauses on hours of work, meal breaks, work models and the employment of contractors which provide increased work flexibility.

With respect to the unions' claim for inclusion of site agreements and customs and practices, it was submitted that the company should not be allowed to walk away from the agreements they entered into with their employees. The Commission should ensure that the company honours the agreements and customs and practices agreed to by including them in the s.170MX award.


Submissions of CQML

CQML submitted that its interests lie in the enhancement of productivity and profitability of the mine consistent with "fair treatment and adequate protection of the interests of its employees". In this case it was submitted the public interest will best be served by an award which is objectively justifiable and "which represents the most effective and efficient exercise of its award making power as is possible consistently with our overall intention to enhance productivity whilst providing fair and enforceable wages and conditions of employment".

It was further put that the public interest would also be served by the Commission issuing an explicit condemnation of the conduct of the unions' officials and members on the picket line.

Submissions of the State of Queensland

The State of Queensland submitted that, as a consequence of the importance the coal industry has to the Australian economy and the difficulties being experienced in the industry due to an increasingly competitive international coal market, the public interest requires special weight being given by the Commission to the removal of restrictive work practices and improving productivity. There is a need for the coal industry, both at a State and national level, to increase its efficiency in order to remain viable and to compete in both the national and international markets.

Submissions of the CFMEU

The CFMEU submitted that in considering the interests of the negotiating parties and the public, the Commission was required to "balance the interests of the negotiating parties" and the impact of the proceedings on the public interest.

The interests of the parties during the bargaining period were stated by the CFMEU to be those found in Annexure FF to Exhibit CEPU2, a document presented by CQML on 18 July 1997 during the negotiations, which reads as follows:

[Exhibit CFMEU29 at 48-49]

The CFMEU submitted that "their members have suffered a substantial reduction in wages" due to changes in rosters following the return to work and the loss of bonus payments. In the CFMEU's submission its claims are not unreasonable.

Submissions of the CEPU

The CEPU submitted that the fundamental difference between it and CQML is the matter of how to manage change. The CEPU submitted that change should occur through close co-operation with the workforce whereas CQML had adopted the approach that it is management's prerogative to direct change.

Having regard to CQML's attitude it is necessary, in the interests of members, to have an award that set out all wages and conditions which, if necessary, could be enforced. This was particularly important in the light of CQML's decision to terminate all workplace agreements unilaterally in September 1997.


Submissions of CQML

CQML submits that the evidence supports findings that the mine, since it commenced operation in 1983, has not performed at the level expected and the return on capital investment is "unsatisfactory and unsustainable". The price for steaming and coking coal is subject to significant commercial pressures. Since the end of the present dispute, productivity has improved, however, the mine is still not profitable and production targets have not been achieved. The future of the mine is "under a cloud".

It is CQML's contention that despite repeated attempts since the mine commenced operation to negotiate changes in work practices with the unions, those attempts have been "substantially unsuccessful". CQML also submitted that where agreements have been reached they have, in the main, "represented continuing restrictions". It was claimed that no "appreciable improvement" occurred to productivity through the removal of restrictive work practices during the first five years of the mine's life.

Under the structural efficiency principle, the industry reached an agreement known as the National Coal Industry Restructuring Agreement which was endorsed by the CIT in 1990. As a result of the agreement, a national open cut work model was developed which was designed to improve work organisation and the development of employee skills as part of the aim of improving the cost efficiency of the coal industry. The local work models (which adopted and modified the open cut work model) became part of clause 20 - Agreements of the P&E Award and were registered with the CIT. CQML submitted that these local work models contain "serious restrictions including demarcations and quarantining of skills".

It was also contended that, in addition to the restrictions contained in the local work models (following their introduction in 1993), many restrictive work practices still remained at Curragh up to the commencement of the dispute in 1997. These restrictive work practices remained, in CQML's submission, despite repeated attempts in enterprise negotiations during 1993, 1994, 1995 and in the recent negotiations to have them removed.

The areas of productivity improvement pursued by CQML in enterprise negotiations over the period were identified as:

Submissions of the State of Queensland

The State of Queensland submitted that the way s.170MX(5)(d) is framed, a s.170MX award should reflect a decision which "prefers" the evidence as to how productivity at the mine might be improved "over evidence of historical practices which, for whatever reason, have not worked at Curragh". The evidence demonstrates that past practices were restrictive and the conditions contained in CQML's award application "points to a real and sensible possibility, even probability" of significant improvements in productivity.

Submissions of the CFMEU

The CFMEU submitted that comparing figures produced by CQML with industry figures on productivity demonstrates that CQML's workforce has a "great record in relation to productivity". The figures relied upon by the CFMEU disclose that for each of the years from 1991/1992 to 1995/1996 saleable tonnes produced per employee at Curragh exceeded average yearly output of tonnes of saleable coal produced per employee in Queensland open cut mines [Exhibits Q4, CFMEU16]. The productivity results, having regard to the difficult geological factors present at Curragh, were "even more meritorious".

The CFMEU, relying on extracts from the minutes of the Joint Venture, submitted that productivity improvements have been achieved at Curragh. CQML's statements regarding productivity are based on an unreasonable productivity target of 16,500 tonnes per employee per year to meet a 12% financial return on investment. The CFMEU submitted that the real cause for the poor financial return from the mine at Curragh is the geological problems and contractual matters and not the policies of the CFMEU.

In the CFMEU's submission, CQML's approach is centred on a "cost cutting approach" rather than seeking flexibilities that will enable the same number of employees to produce more coal. The CFMEU submitted that this submission is supported by CQML's exhibit C18, a report commissioned by the company from Behre Dolbear Australia Pty Limited on work practices at Curragh. It was submitted that this report discloses most of the savings identified result from reductions in employees' entitlements rather than changes to work practices. In the Summary and Conclusions chapter, the report concludes that changes to work practices save "only a very small percentage of operating costs".

In the submission of the CFMEU, the Commission should not adopt an approach in the matter which achieves cost savings at the expense of employee entitlements. The evidence demonstrates that relative labour costs at Curragh compared to the rest of the industry are already lower than the average [Exhibit CFMEU26].

Relying on the evidence of Professor Norman, called by the company, the CFMEU submitted that the mine has, except for the past three years, always shown a profit.

Having regard to the poor geology at the mine and the comparative productivity and cost figures, the Commission should conclude that the Curragh workforce is a productive one. Measures adopted in the 1995 unregistered enterprise agreement resulted in "significant improvements" in productivity in the last quarter of 1996. These measures were:

The CFMEU submitted that their application reinstates the earlier agreements which led to improved productivity and provided further flexibility.

Submissions of the CEPU

In the submission of the CEPU in the period 1991 to 1996 productivity at Curragh as measured by tonnes of saleable coal produced per employee has exceeded the State average of all open cut mines. There is no evidence that electrical employees are imposing any artificial restrictions on the work they carried out. There is also no evidence as to what work CEPU members could perform that they do not already perform to make them more productive. The CEPU is not averse to reaching agreement on 12 hour shifts.

In conclusion, the CEPU submitted there is nothing of substance between it and CQML on productivity issues.


Submissions of CQML

CQML submitted that the "conduct" referred to in s.170MX(5)(e) is not a reference to the negotiating positions taken by the parties during the bargaining period. The Act makes it clear that, without the consent of the parties concerned, the Commission is denied access to the positions taken during a s.170MX conciliation. Accordingly, it would be "highly improbable" that the Act would provide for the Commission to have regard to negotiations which took place at an earlier stage in which the Commission was not involved.

CQML submitted that the focus of attention in s.170MX(5)(e) is on "conduct, not on philosophies, still less on perceptions of industrial protagonists about the object of their opponents". The evidence demonstrates that union officials and members on the picket line during the 15 week stoppage of work "acted aggressively, with hostility and with careless disregard for the feelings, well-being and even safety of those who were subjected to their childish behaviour".

CQML also rejected claims by the unions that it had developed a plan to "stonewall" the negotiations. It submitted that it had negotiated over a lengthy period in an attempt to reach an agreement and the evidence does not support a finding that it was deliberately avoiding an agreement being reached. The Commission should express its disapproval of the conduct of the union officials and members in the strongest possible terms.

Submissions of the State of Queensland

The State of Queensland submitted that there was no evidence of conduct of either the company or the unions which would warrant the Commission from departing from its central task of making an award which assists in improving productivity and removing restrictive work practices at the mine. It was put that there may be circumstances where "unreasonable conduct" might cause the Commission to alter the terms of an award which it might otherwise have made. However, in the State of Queensland's submission, there was no such conduct in this case.

Submissions of the CFMEU

The CFMEU submitted that the Commission should find that the company's conduct during the bargaining period was unreasonable.

The CFMEU relied on a series of exhibits relating to an Operational Review conducted by the company which commenced in 1996 [Exhibits CFMEU11-14]. It submitted that these documents disclose a strategy which was to be followed by the company after it announced a restructure of the mine operations in February 1997. This strategy was reflected in CQML's conduct during the bargaining period, namely:

The CFMEU submitted that CQML's conduct demonstrated:

The Commission should, on the evidence, conclude that CQML's actions were "manifestly unreasonable" and this should be taken into account in assessing the merits of the CFMEU application.

Submissions of the CEPU

It was put by the CEPU that CQML did not produce any evidence to establish that industrial action carried out by the CEPU and its members was action the union was not entitled to take under the Act. There was no evidence of any behaviour by CEPU members of the nature complained of by CQML in respect of CFMEU members.


CQML seeks the making of an award in the terms set out in Exhibits C4, 4A and 4B. In its submission the award it proposes, being a minimum rates award, conforms to the "statutory direction and intention of the Act" and provides a "foundation for further direct bargaining". It was submitted that the evidence supports a conclusion that further direct bargaining is possible.

The award proposed by the CFMEU and the CEPU (the CFMEU/CEPU award) is contained in Exhibit CFMEU29. The substantial differences between the award proposals are summarised in brief under the following subject headings:

Relationship with Other Awards

CQML's award contains no provision going to the relationship with other awards.

The CFMEU/CEPU award provides that the s.170MX award is to be read in conjunction with the P&E Award.

Relationship with Agreements

CQML's award contains no provision going to the relationship with agreements.

The CFMEU/CEPU award provides that unless specifically dealt with in the s.170MX award, all state level and local agreements, whether written or otherwise, signed or unsigned, or custom and practice, which apply to the award parties, will continue to apply for the duration of the award.

Hours of Work

CQML's claim in respect of hours of work is that an employee will not be required to work more than a reasonable number of hours (defined as the hours needed to carry out the work required). Ordinary full-time hours will not be less than an average of 35 per week plus extra hours as may be included in the roster or as needed to do training, early start, late finish, call-back, overtime shifts or in cases of emergency. CQML can require an employee to work a roster that has been notified a minimum of one week in advance.

The CFMEU/CEPU award is for ordinary hours of work to be an average of 35 per week. There is the provision for the working of up to 8.5 ordinary hours Monday to Friday to effect a hot seat change in areas of the mine nominated by CQML. Shift lengths greater than 8.5 ordinary hours can only be implemented by agreement between CQML and a majority of affected employees. Any new rosters are to be manned-up by volunteers. If too many volunteers apply, the most senior will be selected. If too few volunteers apply, the most junior will be selected.

Tolerance Time

There is no provision for tolerance time in CQML's award.

The CFMEU/CEPU claim is for tolerance time of 5 minutes before the end of a rostered shift to bathe without loss of pay.

Crib Time

CQML's claim is for employees working an 8 hour shift to get one 30 minute paid meal break. For a 12 hour shift employees would receive two 30 minute breaks. Crib breaks are to be taken at the direction of CQML but before more than 5 hours continuous work has been performed unless otherwise agreed with the employee.

The CFMEU/CEPU claim is for employees to receive 30 minutes for crib on each (8.5 hour) shift, counted as time worked. Crib times are designated for each shift. Crib will be paid at overtime rates if the employee is requested to take crib before or after these times.


CQML's award contains no provision for smoko.

The CFMEU/CEPU award provides for smoko of 10 minutes without loss of pay not more than 2 hours after the start of shift.


CQML's claim is for unrostered overtime to be paid at the appropriate hourly rate set out in Schedule 1. No extra allowances, penalties or disabilities are to apply.

The CFMEU/CEPU claim is that all time worked in excess of or outside rostered time will be paid at $42.64 for employees receiving the 100% rate. Employees on the 90% level will receive 90% of the aforementioned rate.

Work Model

CQML's award provides that employees will perform any work within their skills, training, experience and knowledge. No work model is provided for.

The CFMEU/CEPU award provides for a work model. Skills are to be quarantined at fifteen. Provision is made for a limitation on the gaining and use of skills such that tradesmen cannot operate draglines etc. for production purposes nor can they perform explosives handling. Engineering employees are able to test all production equipment for maintenance purposes and/or relocating equipment for any purpose.


CQML's annualised salary proposal is set out in Schedule 1 of Exhibit C4. Three levels are provided for.

The CFMEU/CEPU proposal is an annualised salary comprising a base payment plus an entitlements payment plus bonus to equal the full salary rate of pay. The entitlements component is an all-inclusive payment. Clause 14 sets out the salary for a 5 day roster and a 7 day roster.

Payment of Wages

CQML's proposal is that employees will be paid monthly.

The CFMEU/CEPU proposal is that payment of wages be in accordance with the provisions of the P&E Award. In addition, Clause 15 provides for the transfer of funds from an employee's pay on their instruction for miner's pension and other designated purposes, including union dues and levies.


CQML's award provides no coal bonus.

The CFMEU/CEPU award provides for a bonus based on planned production and railing of 3.2mtpa with 122 production and engineering employees. A minimum payment is guaranteed.

Christmas Bonus

CQML's award contains no Christmas bonus.

The CFMEU/CEPU award provides for a Christmas bonus of a full week's average bonus, calculated over the previous calendar year.

Medical Benefits

CQML's award does not include a medical benefits payment.

The CFMEU/CEPU award provides for a medical benefits payment of $4 per week net for married employees and $2 per week net for single employees who belong to a registered private health fund.


There is no provision for accommodation in CQML's award.

The CFMEU/CEPU award provides that rental payments for Company-provided housing are to be fixed for the duration of the award. The provision of facilities such as air conditioners is required, as are maintenance requirements such as carpet cleaning and pest control.

Provision of Protective Clothing & Wrist Watches

CQML's award contains no provision about protective clothing or wrist watches.

The CFMEU/CEPU award provides that each employee will be provided with one pair of safety boots and two sets of industrial outer clothing per annum. Employees will get a choice of prescribed items.

Prescription Safety Glasses - Subsidy Policy

CQML's award does not provide a subsidy for employees' prescription safety glasses.

The CFMEU/CEPU award provides that CQML will subsidise employees' prescription safety glasses. Work-damaged glasses will be replaced. Tinting will be paid for by CQML. A maximum of one pair of subsidised prescription glasses will be provided to wearers every two years.


CQML's award does not provide for consumables.

The CFMEU/CEPU award requires CQML to supply consumables such as tea and coffee and cleaning products for use at the mine.

Manning Levels

CQML's award does not provide for minimum manning in any respect.

The CFMEU/CEPU award provides for overall manning levels as well as manning for drills, draglines and the washery.


CQML's award prescribes that CQML has absolute discretion to engage any contractor for any period of its choosing to perform any work which might otherwise be done by employees to whom the award applies.

The CFMEU/CEPU award provides for three categories of contractors: permanent contractors, other contractors and exempt contractors. Permanent contractors work in those areas contracted out as at the date of commencement of the award. Expansion to these areas can only be by agreement with the CFMEU and/or CEPU. Other contractors are those that do work on a short-term, one-off contract basis. Exempt contractors are those that do work covered by a mine construction project, warranty or commissioning work, specialised technical services or work not usually done by P&E Award workers. Terms and conditions of employment are set out for each category.

Demarcation with Staff

CQML's award does not provide for any demarcation between production and engineering employees on the one hand and staff on the other.

The CFMEU/CEPU award provides some limitations on the work that administrative and supervisory employees can do. Staff cannot undertake work covered by the P&E Award but are able to perform minor tasks and/or tasks that are incidental or peripheral to their main task. An indicative list of such work is contained in Clause 27.

Disputes Procedure

CQML's award does not provide for a disputes procedure.

The CFMEU/CEPU award provides for a disputes procedure which is based on the P&E Award provision and includes a status quo provision.

Introduction of Change

CQML's award contains no introduction of change provision.

The CFMEU/CEPU award contains an introduction of change provision which compels CQML to notify employees and unions about certain major changes in the workplace which will significantly impact on employees. CQML must discuss such changes with employees and unions within a defined set of parameters.


CQML's award does not provide for discussions to be held with employees and unions before terminations occur. It provides for retrenchment on the basis of merit. No severance or retrenchment pay is required.

The CFMEU/CEPU award requires discussions to be held with employees and unions prior to terminations occurring. A seniority-based reduction of hands clause is included. Severance and retrenchment pay is based on the P&E Award, adapted to take account of the CFMEU/CEPU annualised salary proposal.


CQML's award does not provide for union representation in the areas of lodge officers and delegates, right of entry, union meetings, employee inductions and interviews and trade union training leave. Nor is a union encouragement clause included.

The CFMEU/CEPU award provides for lodge officers and delegates, right of entry for union representatives, paid union meetings, union representation at employee inductions and interviews, a union encouragement clause and trade union training leave.

Bona Fide Union Business

CQML's award does not provide for bona fide union business.

The CFMEU/CEPU award provides for paid arbitration leave. However no payment is required in the event that the union has failed to comply with the disputes procedure.

Preference to Retrenched Mineworkers

CQML's award provides that CQML may select and engage any employee on merit.

The CFMEU/CEPU award provides for preference to retrenched mineworkers at the point of engagement.


Detailed submissions were made to us on the nature of the approach the Commission should adopt in this arbitration. CQML argued that in making an award under s.170MX(3) the Commission is:

Whilst CQML acknowledged that the Commission was directed in s.170MY to "addressing matters in issue rather than industrial disputes" it submitted the "exercise of the powers takes colour and meaning from the operation of Part VI itself, except for the operation of section 89A" [Exhibit C30 at 11]. CQML concluded its argument in this respect by submitting that:

CQML also submitted that ss.170MX(3) and 170MY of the Act must be interpreted in a way which promotes the objects of the Act which emphasise the maintenance of a system of fair minimum wages and conditions of employment.

It further argued that the objects of Part VIB of the Act were directed to facilitating the making and certifying of agreements and that as a result whether the powers exercised by the Commission are to be regarded as Part VIA powers or as Part VIB powers the exercise of them should result in:

It is to be noted that during his oral submissions Mr Buchanan QC, who appeared with Mr Martin for CQML, acknowledged that an award under s.170MX of the Act cannot be regarded as a safety net award for purposes of the no disadvantage test. He argued that nothing in s.170MX, MY or MZ of the Act or any other specific provision of Part VIB gives support to the suggestion that the Commission should exercise its discretion under s.170MX to make an "award in the same form (or as close as might be achieved) as a hypothetical but unrealised certified agreement" [Exhibit C30 at 18].

The Commonwealth submitted that the Commission should approach s.170MX of the Act in the following way:

The CFMEU and CEPU also supported the approach taken in Australian Municipal, Administrative, Clerical and Service Union v Western Australian Government Railways Commission [(1997) 74 IR 423] (the Westrail case).

The CFMEU relied in particular on the following passage:

The Queensland Government submitted as follows:

It will be noted from the above summary of the position of the parties before us that CQML is alone in arguing that there is no essential difference in performance of the Commission's arbitral function under Part VIB of the Act from the performance of the arbitral function under Part VI.

CQML's argument is inconsistent in our view with the approach taken by the Commission in the Westrail case set out earlier in this decision. It is also inconsistent with the following statement in this case by this Full Bench in the interim award decision:

However, because the matter was fully argued we propose to deal with the argument. We affirm that s.170MY of the Act is not intended to make generally applicable the legislative approach to arbitration contained in Part VI of the Act. Rather, it is to make applicable specific powers contained in that part to an arbitration the scope of which is determined by s.170MX(5) of the Act. This is we think the plain meaning of the language used. It follows that the approach to be taken to an arbitration under s.170MX is governed by the context in which that section appears in Part VIB rather than by Part VI. Accordingly, we endorse the views expressed in the Westrail case. In this respect we also endorse the submission of the Commonwealth in this case in discussing the operation of s.170MX(5) of the Act, that in no sense was the Westrail Full Bench suggesting some form of subjective prognostication as to the outcome of the negotiations had they been concluded successfully by the parties to an arbitration under s.170MX. We believe that the proper construction of what the Full Bench said is, as the Commonwealth submitted, that an objective assessment of the factors set out in s.170MX(5) of the Act should be made to determine whether to make an MX award and what such an award should contain. In deciding what the award should contain the Commission is uninhibited by the restrictions in s.89A - a further indication of the difference between arbitration pursuant to s.170MX and arbitration under Part VI.

We note that it is consistent with this approach that while a s.170MX award cannot be a safety net award for purposes of the no disadvantage test it may nevertheless be a minimum rates award. This is in contrast with the position which obtained under the Industrial Relation Act 1988 which required the Commission in arbitrating following the termination of a bargaining period under that Act to make a paid rates award.

We reaffirm that there is a significant difference between the approach to be adopted by a Full Bench to an arbitration under s.170MX and that which should be adopted under Part VI of the Act. Many of the constraints upon the exercise of arbitration powers under Part VI - in particular those implicit in s.88B and explicit in s.89A - are not applicable to s.170MX arbitrations. It follows that the outcome of arbitrations under s.170MX will rarely have any relevance in arbitral proceedings under Part VI. Indeed, because of the need to have regard to the factors set out in s.170MX(5), it is doubtful whether the outcome of a s.170MX arbitration would have any precedent value in arbitral proceedings whether under Part VI or under any other provisions of the Act. On the other hand, whilst the Commission can take the contents of Part VI awards into account when arbitrating under s.170MX, it must do so in the context of s.170MX(5) and free of the restraints upon power contained in Part VI.


CQML argued that it was desirable that "a completely new enterprise specific award be made". It submitted that:

All other parties and the interveners submitted the arbitration was confined to the matters at issue during the bargaining period. For example the Commonwealth submitted:

Similarly the Queensland Government submitted as follows:

We agree with these latter submissions. The language of s.170MX(3) clearly limits the exercise of arbitration powers, where the Commission considers it appropriate to exercise such powers at all, to the making of an award that deals with the matters that were at issue during the bargaining period.

Moreover, in our view, such a construction is consistent with the objects of the part which is designed to facilitate the making and certifying by the Commission of agreements. Section 170MJ of the Act specifies inter alia, that the party initiating a bargaining period must give notice of the matters that the initiating party proposes should be dealt with by the agreement. Section 170MX(3) provides, as noted above, that if after the exercise of the conciliation powers of the Commission the negotiating parties have not settled the matters that were at issue during the bargaining period and further conciliation is not likely to resolve those matters within a reasonable time the Commission must, if it considers it appropriate, exercise arbitration powers to make an award that deals with the matters. It seems to us that the whole of the Division manifests an intention to limit the Commission's arbitral powers to those matters about which the parties cannot agree. To suggest that the Commission is at large to arbitrate on any matter following the cancellation of a bargaining period under s.170MW(3) or (7) seems to us to be at odds with the legislative scheme.


In all of the circumstances, we have decided that it is appropriate to deal with the major matters in issue between the parties in the negotiations during the bargaining period and to make appropriate award provisions. The matters with which we intend to deal in detail are:

Before dealing with each of these issues we turn briefly to the matters specified in s.170MX(5) to which we are obliged to have regard. Whilst a number of the matters are dealt with in the course of dealing with each of the issues we have just listed, some general comments are also appropriate.

(a) The matters that were at issue during the bargaining period

Since it is clear that our decision is principally concerned with the matters that were at issue during the bargaining period, there is little more to be said on this topic.

(b) The merits of the case

The merits are intrinsic to the consideration of each of the issues which we have decided to deal with.

(c) The interests of the negotiating parties and the public interest

The Commission must exercise broad judgment to produce an outcome which is a fair compromise between the legitimate expectations of the respective parties and which also takes the public interest into account. The CFMEU properly drew our attention to issues concerning the interests of the employees, including issues such as earning levels and equitable treatment in relation to working hours. CQML adduced evidence and made submissions concerning productivity and profitability. The State of Queensland drew our attention to the economic significance of the coal industry and the mine's contribution to it and the potential for a greater contribution.

There is a range of factors affecting profitability and productivity. Our ability to influence the profitability and productivity of the Curragh mine, however, is limited to the area of direct labour costs and some work practices which are founded on award conditions. It is a truism that unless the mine is profitable its future, and the welfare of its employees, will be in jeopardy.

(d) How productivity might be improved in the business or part of the business concerned

We do not intend to approach the issue of productivity in a technical way. There was a great deal of material before us directed at measuring the cost of production at the mine, at other Queensland and Australian mines and at mines in the United States of America. To the extent that this evidence invites us to draw conclusions about labour productivity at Curragh compared with elsewhere, we think it is an invitation to error. Productivity measurement involves a multi-factor approach which assesses all relevant inputs on a comparable basis. We are not satisfied that we have sufficient evidence to draw valid comparisons even on labour productivity at the mine, much less on productivity overall. Whilst the material might contain useful broad indications of labour productivity, we do not think it conduces to any certain conclusions. We are required to consider how productivity might be improved. One way in which the Commission can contribute to productivity improvement is to give attention to unreasonable restraints on productivity and to eliminate them wherever that can be done consistently with the maintenance of fair standards of treatment for employees. We think it is preferable to focus directly on the elimination of unreasonable restraints on productivity rather than on the measurement of productivity in absolute terms or on inter-mine comparisons of productivity levels.

(e) The extent to which the conduct of the negotiating parties during the bargaining period was reasonable

CQML submitted that we should take the nature of the picketing conduct into account. Much of the conduct which we observed (on video tape) appears unreasonable and cannot be condoned, indeed, should be actively discouraged. Nevertheless, because it appears that the picketing was lawful and police were usually present to protect against breaches of the peace we are disinclined to take the picketing conduct into account in arriving at a decision in this case.

The CFMEU asked us to take into account a number of aspects of CQML's conduct during the negotiations. As already noted our attention was drawn in particular to allegations of:

While we have little doubt that there is a factual basis for many of the allegations contained in the detailed submissions on these points, we are unable to accept the CFMEU's submission that CQML's behaviour was "manifestly unreasonable". It is relevant that the CFMEU's initiation of a bargaining period on 11 March 1997 was a direct response to CQML's announcement on 28 February 1997 that it planned a major restructure of the mine's operations including reductions in the size of the workforce, introduction of contractors, introduction of 12 hour shifts and changes in work practices. It is also relevant that most of the employees were on strike for approximately 15 weeks, the intention of the strike being no doubt to place economic pressure on CQML by closing down its operations. In all of the circumstances we do not agree with the CFMEU's submission that CQML's conduct during the bargaining period was manifestly unreasonable. Rather we see this case as one where both sides took a very strong stand on the issues of principle which they held dear and fought tenaciously to maintain their positions. By no means was this a model negotiation, but we are not prepared to attribute blame to one side or the other by labelling their conduct as unreasonable.

In the circumstances it is not strictly necessary that we rule on CQML's submission that the word "conduct", where it appears in s.170MX(5)(e), should be construed so as to exclude any consideration of the negotiating positions of the parties. Whilst we do not believe that exploration of the strategies, tactics and motivation of the parties is likely to be relevant there could be occasions where the position taken by parties and the objective justification for that position, or the lack of it, could be properly taken into account pursuant to s.170MX(5)(e). We do not need to explore the matter further in this case, although we point out that the Commission is given a broad discretion to take any relevant matters into account pursuant to s.170MX(6).

CQML asked us to give a firm indication, for guidance in future cases, that:

We agree with the sentiments contained in this passage. Much of the material produced by CQML at the CFMEU's request and tendered in evidence (subject to objection) was unhelpful and irrelevant to our task. To that extent additional time was wasted in that the tender of that material provoked the tender of further material by CQML in rebuttal. Parties must be free, within reasonable bounds of relevance, to conduct their cases as they see fit. Nevertheless, there is much to be said in cases of this kind for preserving, as far as it can be preserved, the traditional distinction between negotiation and arbitration so that the task of arbitration can take place without any need to examine the relative correctness of the parties' negotiating positions or tactics unless such an examination contributes in an objective way to an evaluation of the merits of the claim. Such an approach is not inconsistent with the requirement upon the Commission to have regard to the extent to which the conduct of the negotiating parties during the bargaining period was reasonable.

1. Staffing levels

Staffing levels have been the subject of awards and agreements, registered and unregistered, over the life of the mine. Whilst the unions and CQML take opposing philosophical points of view, the unions did not produce any evidence tending to the conclusion that existing staffing levels were unfair or that if no provision was made for staffing levels CQML would impose unreasonable workloads on its employees. We think it would be wrong to make assumptions adverse to CQML about its future behaviour, in the absence of evidence of the requisite kind we intend to make no provision for staffing levels at all. The award which we make will have a provision excluding any parts of the P&E Award which might otherwise have the effect of regulating staffing levels.

2. Demarcation, including the work model and the use of contractors

There are three elements to be dealt with under this heading: the work model, engagement of contractors and demarcation with staff.

(a) The work model

The parties' submissions on this matter have already been set out. We can find no objective, supporting rationale for the continuation of the work model concept. The quarantining of skills and limitations on the performance of production tasks by tradespersons are just two examples of an outmoded approach to work organisation. CQML's proposal is that employees shall perform any work within their skills, training, experience and knowledge. Implicit in that approach is that all legal requirements are met and that safety is not compromised in any way. Limitations on the work to be performed by employees which are not genuinely based on lack of skills, experience or legal qualifications or on a well-founded safety consideration, constitute barriers to efficiency and an impact on production which the coal industry cannot afford. Whilst parties are free to negotiate on such matters, when the issues are before the Commission for consideration we will not impose such costs on unwilling employers. That having been said, however, the fact that our decision may lead to changes in the scope of the duties traditionally performed by employees is a matter which we have taken into account in framing our decision in relation to remuneration.

(b) Engagement of contractors

The CFMEU seeks to regulate the terms and conditions of engagement of contractors and to make any major new contracting out subject to prior agreement with it. We were told that although there has been agreement at industry level on such regulation in the past, there have not been award provisions as such. We are not prepared to prescribe by award what has never been so prescribed before in the coal industry. In this connection we note that the use of contractors is not a source of friction for CQML with the CEPU, or, at least since agreement was reached earlier this year, with the AMWU. In the circumstances it is not appropriate or necessary that we comment on the possible jurisdictional barriers to the CFMEU's claim.

(c) Demarcation with staff

On this question, largely for the reasons outlined above in connection with the claim for a work model, we have rejected the CFMEU/CEPU claim. We add that we were presented with no evidence which would justify a virtual prohibition on staff undertaking work covered by the P&E Award other than work which is incidental or peripheral to some other task. The creation of such a demarcation by award would necessarily be unrelated to the dictates of effective work organisation and could possibly lead to disputation about where the line should be drawn in a particular case.

3. Past custom and practice

The CFMEU and the CEPU sought the inclusion in any award we make of a provision equivalent to clause 9 of the P&E Award. The provision sought is summarised above under the heading "Relationship with Agreements". They relied upon the existence of the clause in the P&E Award and a similar provision in the Coal-Mining Industry (Mines) Award 1954 Queensland (CR1057). They also pointed to CQML's withdrawal from all existing agreements on August 6, 1997 while protected action was occurring. We were told that there were some 200 written local agreements with the unions during the life of the mine. Whilst CQML continues to implement the terms of a number of agreements it has repudiated the agreements themselves. The provision the CFMEU and the CEPU seek would have the purpose and effect of continuing in operation agreements currently "in force" and provide for disputes about the existence or application of agreements to be dealt with through the disputes procedure. We doubt that there is a firm jurisdictional basis for such a provision. We cannot assume that all agreements are within the ambit of any relevant dispute. But in this case, other considerations are decisive:

If, as we hope, this decision provides the environment for a return to bargaining at the mine, in due course and after the expiry of this award, there will be an agreement certified which properly reflects any additional important matters agreed between the parties. The award we make will ensure that clause 9 of the P&E Award does not apply at the mine.

4. Seniority

The CFMEU and the CEPU sought seniority provisions in relation to staffing of new rosters and in selection for redundancy. Whilst CQML rejected seniority on the basis that it constitutes a form of discrimination which is either prohibited by the Act or contrary to its objects, the unions sought to justify seniority as a necessary protection against arbitrary selection decisions by the employer. They pointed to the long history and wide use of seniority provisions in the coal industry.

On issues such as this we believe that we should apply the Commission's established principles in dealing with questions of management discretion. CQML is entitled to select employees on the basis of merit and in the interests of maximising efficiency provided it does so fairly. There was no evidence of capricious selection in the past, no doubt partly because provisions such as these have operated in the industry for some time. In relation to redundancy, there are other provisions, in Part VIA of the Act, by which the legislature has sought to deal in a comprehensive way with protection of employees against unfairness. These provisions are available if necessary.

Our award will ensure that any relevant provisions in the P&E Award have no application at the mine.

5. Hours of work

CQML proposed the introduction of provision for 12 hour shifts. It is common ground that 12 hour shifts are not uncommon in the industry but the unions insist that such shifts, consistent with industry practice, should only be introduced by agreement. CQML produced a detailed 12 hour shift proposal and the unions made no specific criticism of it. Given the recent history of negotiations at the mine we have decided to approve the working of 12 hour shifts as proposed by the company. There will be specific provision made for disputation to be dealt with, if necessary, by a member of the Commission pursuant to a dispute settlement procedure. We should indicate that our award will contain a provision similar to that contained in the agreement between CQML and the AMWU.

6. Wages, including classifications and bonus

During the negotiations the CFMEU and the CEPU accepted the concept of an annualised salary and on that basis now seek an increase of 5.6% for a one year award. The increase is supported by the cost reductions flowing from the introduction of an annualised salary and the flexibilities which CQML now enjoys which are said to be of an order greater than those achieved at any other Queensland open-cut mine.

CQML asked us to introduce a minimum safety net award which adopts the award rate at the top of the structure but reducing the six levels in the award to three. We do not understand the unions to object to a three level structure. In the circumstances we intend to adopt it. Furthermore, the flexibilities in work which will result from our award justifies a significant increase in the salaries contained in the P&E Award. Given the historical relationship between rates for miners and rates for tradesmen, and taking into account the importance of relativities on a mining site, we have decided to adopt the rates contained in the Agreement between CQML and the AMWU certified on 14 January 1998.

The CFMEU also sought a restoration of production bonus payments which applied at the mine prior to the dispute. The bonus was discontinued on 25 September 1997. An interim bonus agreement was struck on 3 October 1997 between CQML, the CFMEU and the CEPU. CQML wrote to the unions confirming the interim arrangements and included a proviso that if the unions took industrial action CQML would withdraw from the interim arrangements. Subsequently, on 22 October 1997, CFMEU members were involved in a 24 hour stoppage in protest over a manager operating equipment. CQML withdrew from the arrangements the following day, 23 October 1997. Since that time CFMEU employees have not received any bonus payments. This has resulted in a significant loss of earnings for the employees. The CFMEU submitted that CQML has acted unfairly and that the bonus should have been maintained pending a decision in this case. Reliance was placed on some comments from Boulton J in proceedings involving the CFMEU and the Coal and Allied Pty Ltd on 21 November 1997. We do not find his Honour's comments apposite to this case. The October agreement was conditional on industrial action not occurring and the CFMEU members breached that condition.

CQML opposed the prescription of a bonus, consistent with its approach that any regulation should be of a minimum nature. It submitted that the CFMEU could not complain about the cessation of the interim agreement because CQML had entered into the agreement on the express condition that no industrial action would occur pending this arbitration.

We are in no doubt the company's construction of the interim agreement is correct, indeed it was considered to be so by the CFMEU. In the circumstances, however, we think the financial penalty which has been borne by the CFMEU employees in the intervening months is excessive. We have decided to temporarily reinstate the bonus and our award will provide for its operation from the first pay period in 1998 until the commencement of operation of the new salary and classification structure we have decided upon. The bonus should be calculated in accordance with Exhibit RC3 to CFMEU 21.

Annual performance payments are provided for in the AMWU Agreement. The unions' production bonus proposal in this case is based on an annualised approach in which the performance of employees as a group is taken into account. A group approach is no longer valid because the AMWU members are separately remunerated for performance based on an individual assessment. We are not prepared to continue the interim production bonus arrangement once the new salary structure is implemented. We direct the parties to confer on an appropriate scheme. If the parties cannot agree this issue will be determined in conjunction with the settlement of the orders.


P&E Award

Apart from the matters we have dealt with we intend that the award should operate in conjunction with the P&E Award as varied under Items 49 and 51 of the Workplace Relations and Other Legislation Amendment Act 1996 or s.113 of the Act pursuant to the award simplification principles. In the event of inconsistency, this award should prevail. Otherwise, consistent with the operation of s.170MZ, it is our intention that variations to the P&E Award should not have application at Curragh.


We have decided that the award should have a nominal expiry date 12 months after the date on which it is made.

Settlement of orders

An order to give effect to our decision is to be drawn by CQML and will be settled by Senior Deputy President MacBean with recourse if necessary to the Full Bench.




A Slevin with M Jaeger and A Vickers for the Construction, Forestry, Mining and Energy Union.

B Devlin for the Australian Manufacturing Workers Union.

G Gosling with D R Dawes for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

R J Buchanan QC with G Martin for Curragh Queensland Mining Ltd.

J Douglas QC with S J Lee for the State of Queensland.

K Rehn and S Amendola for the Commonwealth.

Hearings details:



October 21; (before Justice Giudice, President)


November 14.



February 2-6, 9-12.


March 26; (before Senior Deputy President MacBean)


March 30, 31;

April 1.

Decision Summary


Enterprise Bargaining - termination of bargaining period - arbitration - s170MX Workplace Relations Act 1996 - various employees, coal industry - bargaining periods terminated on Commission's own motion following 15 week strike - conciliation unsuccessful - agreement reached and certified with AMWU post conciliation - application for interim award sought dismissed - conditions of employment for CEPU and CFMEU members regulated by Coal Mining Industry (Production and Engineering) Consolidated Award 1997 (P&E) and P&E clause 20 local work model agreements approved by Coal Industry Tribunal - s170MY not intended to make generally applicable the legislative approach to arbitration contained in Part VI of Act - s170MX arbitration to be approached in context that section appears in Part VIB - s170MX(5) factors should be objectively assessed to determine whether s170MX award should be made and if so, provisions to be included - s170MX award cannot be safety net award for no disadvantage test purposes but may be minimum rates award - s170MX(3) allows arbitrated award to deal only with matters at issue in bargaining period for which no agreement reached - Commission must exercise broad judgement to produce fair compromise between legitimate expectations of parties and which takes account of public interest - merits of each matter intrinsic to consideration - traditional distinction between negotiation and arbitration should be as far as possible preserved - arbitral task can proceed without examining parties' negotiating positions or tactics unless examination objectively contributes to evaluating merits of claim - staffing levels subject of awards and registered/unregistered agreements throughout mine's life - no evidence existing staffing levels unfair or that employer would impose unreasonable workloads on employees if award didn't include staffing level provision - award will exclude any P&E provision regulating staffing levels - no objective rationale to support continuation of work model concept - quarantining skills / limiting performance of production tasks by tradespersons examples of outmoded work organisation and barriers to efficiency as limitations not based on lack of skills, experience or legal qualification or well founded safety consideration - regulating terms and conditions of contractors' employees not traditionally regulated by award - Commission not prepared to prescribe what never previously regulated by award in coal industry - union claim for demarcation between staff and P&E employees rejected - preventing staff undertaking P&E work may lead to disputation and is unrelated to dictates of effective work organisation - company entitled to select employees on merit basis in interests of efficiency - no evidence of previous capricious selection - Part VIA provides employee protection against unfairness in redundancy - P&E seniority provisions will not be included in award - company claim for 12 hour shift arrangements approved in form similar to AMWU agreement provided Commission may intervene in disputes concerning its application - company's proposed three level classification structure to be introduced - bonus system reinstated with operation from first 1998 pay period to commencement of award classification/salary structure - significant pay rise awarded by adopting pay rates in AMWU agreement having regard to greatly increased flexibilities and efficiencies, traditional miners' rates and importance of relativities on mine site - award to operate in conjunction with P&E as varied under Award Simplification principles - award prevails to extent of inconsistency - no application of P&E variations to P&E at site - nominal expiry date 12 months after award made.

Construction, Forestry, Mining and Energy Union and others and Curragh Queensland Mining Limited

C Nos 22757 of 1997 and others

Print Q4464

Giudice P

MacBean SDP

Polites SDP


11 August 1998

Printed by authority of the Commonwealth Government Printer

<Price code J>

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