The power switch at Robe River

Author	Gethin, Patrick, 1936-
Publisher	Perth, W.A. : Australian Institute for Public Policy, c1990.
ISBN	0949186376, 9780949186379
Length	iv, 71 p. : ill. ; 21 cm.

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ABBREVIATIONS

The following abbreviations are used in the text:

AMIEU = Australasian Meat Industry Employees Union
AMWSU = Amalgamated Metal Workers and Shipwrights Union
AWU = Australian Workers Union
CMEU = Construction, Mining and Energy Workers Union
CRRIA = Cliffs Robe River Iron Associates
CWAM = Cliffs West Australian Mining Co. Pty Ltd
ETU = Electrical Trades Union
FEDFU = Federated Engine Drivers and Firemen's Union
ICC = Iron Ore Industry Consultative Committee
RRIA = Robe River Iron Associates

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INTRODUCTION

On 31 July 1986 a major challenge was made to entrenched union power in the Western Australian iron ore industry.  The Robe River Mining Company told its employees and their unions that years of restrictive work practices were ended.  At the same time Robe notified the State Industrial Relations Commission that it was withdrawing all pending applications.  Shortly before taking this action, Robe had dismissed most of its top management in Perth and at the site of its Pilbara operations, replacing them with new men.  These moves showed that Robe would no longer follow the previous management's policy of settling industrial problems by negotiation, conciliation and arbitration.  The company had clearly shown that it intended management to manage without the assistance of unions or the Commission.

This meant a drastic change in the power and influence of the full-time union convenors who did virtually nothing but union work while the company provided them with salaries, housing, offices, transportation, expense account coverage and telephone calls.  Practices long established by "negotiation", such as overmanning, pay for work not done and not asked or required to be done, and artificial demarcation of jobs, were ended.  No longer would the company enforce a closed shop and collect union subscriptions by pay roll deductions.

From January 1985 to July 1986 an average of 5,293 hours' working time per month had been lost through strikes and work bans.  Not a single month was free of industrial action.  However, the unions did not respond to the changes of 31 July 1986 by striking.  Instead they applied to the Industrial Relations Commission for an Order restoring the work practices which had been ended by Robe's notice.

On 5 August 1986, Commissioner Coleman ordered Robe to restore the pre-31-July status quo for 30 days, while conferences took place under his chairmanship to resolve the dispute by conciliation.  But many changes to work classifications, shifts and rosters had meanwhile been made in the many scattered locations in which Robe's workforce was deployed.  Encouraged by the "status quo" order, more militant workers chose to ignore changes in their classifications, rosters or shift times.  Robe responded by dismissing workers for disobeying lawful instructions.  At the request of the unions, the Commission convened a further compulsory conference and on 11 August 1986 ordered reinstatement of the sacked workers without loss of entitlements and without changes in their old classifications, shifts or rosters.

More workers now acted in defiance of the new work arrangements the company had put in force.  Some reported for work in accordance with the pre-31-July arrangements, while others reported in accordance with the new arrangements.  The result was that supervisors had no control over the operations for which they were responsible.  The company's four registered mine managers, who had statutory responsibility for safety under the Mines Regulation Act, therefore concluded that they could no longer meet their statutory obligations, and Robe decided to close down its operation at the start of the night shift on 11 August.  At the same time Robe gave notice of dismissal to all its 1248 wages employees.

The dispute was then referred to the Commission in Court Session, where proceedings reached their conclusion on 5 December 1986.  In the meantime Robe had been ordered to re-employ the workforce and to compensate the workers for the three-week period between their dismissal and re-employment.  The proceedings revealed a number of outrageous restrictive work practices which had been ended by Robe on 31 July.  The Commission was scathing in its comments about restrictive work practices and the behaviour of the unions under the old management, but it reserved its severest criticism for Robe's action in dismissing the workforce.

There were many other proceedings between Robe and the unions in the Commission and in the Industrial Appeals Court over questions which had arisen directly or indirectly out of the main dispute.  In a number of cases Robe obtained decisions invalidating Orders of the Commission on the grounds that the Commission had exceeded its powers.  Perhaps the most significant of these were the decisions of the Full Bench of the Commission setting aside Commissioner Coleman's "status quo" Orders of 5 and 11 August.

The real result of the conflict at Robe River is that the company succeeded in what it set out to do by ending almost all restrictive work practices.  The unions abandoned their claim for restoration of about 90 per cent of the old practices.  Of the 32 claims they proceeded with, most were rejected by the Commission.  Robe gained significant increases in production and productivity with a reduced workforce.  The only penalty it suffered was the payment of compensation for wages lost by the workforce during the three week period of their dismissal.  The dispute was a major defeat for the unions involved.  The whole dispute calls into question the need for a system of compulsory arbitration and particularly the values that are enshrined by statute and practice in that system.

This book will examine the nature of the Robe River project and say something about the concept and role and the power of unions generally.  It will then examine the dispute in detail and comment on some of the published writings about the dispute.  It will conclude by illustrating some of the lessons about Australian industrial relations that can be learned from the dispute.

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ROBE RIVER

BACKGROUND

The development of iron ore mining in the 1960s is one of the great mineral booms of Western Australian history.  Between 1965 and 1977, the value of iron ore production increased from $44 million to $951 million as miners and their machines carved away at the massive iron ore deposits in and near the Hamersley Range in Western Australia's Pilbara region.  With that boom came the establishment of new towns such as Newman, Dampier, Wickham, Pannawonica, Tom Price, Paraburdoo, Mount Goldsworthy and Shay Gap.

In the early 1960s Cleveland-Cliffs Iron company commenced exploration work on the Middle Robe limonitic deposits in the Western Region of the Pilbara.  Although Robe limonitic ores average only 57 per cent iron, the removal of combined water via pelletising produces blast furnace feed of 63 per cent iron content.  In the 1950s Cleveland-Cliffs had developed the processing methods required to pelletise such ores successfully.  The company formed a joint venture with American, Australian and Japanese interests to mine, pelletise and export ore from Robe River.  The consortium was known as Cliffs Robe River Iron Associates (CRRIA).  By the Iron Ore (Cleveland-Cliffs) Agreement Act 1964 it had the right of occupancy of the Robe River iron ore reserves and other areas necessary for carrying out its mining and shipping operations.

In 1969 the joint venturers signed long-term contracts with Japanese steel mills.  Initial contracts were for 87.7 Mt (million tonnes) of pellets over 21 years and 73.2 Mt of sinter feed over 15 years.

The original Robe development was based on a reserve of 321 Mt of limonitic ore in mesas stretching 30 km along the Robe River, and included access to certain deposits held by BHP.  By agreement with the Robe joint venturers, BHP had an option to acquire a half share in the rail and port facilities and, if it so desired, to take over full ownership and management of the port facilities.  (BHP exercised its option and acquired a half interest in the rail and port in 1975, but by agreement Cliffs Western Australian Mining (CWAM) continued management of the whole CRRIA joint venture project.)

In 1970, the joint venturers let tenders for the construction of the mine, railroad, crushing, pelletising and power plant, stock pile and shipping facilities and towns and infrastructure.  Initial capital investment was $275 million.  Shipping commenced in October 1972 with an annual designed capacity of 4.2 Mt of pellets and 3.8 Mt of sinter fines.  Through a series of expansions, rated capacity was subsequently increased to 20 Mt per annum of crude ore, yielding 5 Mt per annum of pellets and 14.4 Mt per annum of fines.  In 1980, the joint venturers ceased production of pellets due to high energy costs (thanks to the OPEC oil price increases), poor plant availability and low productivity caused by industrial relations problems, and a lower acceptance of level of pellet burden by ironmakers.

MINING

The Robe River limonite deposits exist as mesas rising above the Robe River valley floor;  the top 20-40 metres containing the mineable thickness of the Robe pisolite.  Individual mesas contain from 1 Mt to well in excess of 500 Mt of ore.  Only those exceeding 5 Mt are of economic significance.

Today mining is by conventional truck and power shovel, loading 80,000 tonnes per day of run-of-the-mine ore to 150-car ore trains.  Truck hauls average 4 km, generally downhill.  The mine runs on a 5 day, 3 shift basis, with two drills, three operating 9.5 cubic metre shovels and two 10.5 cubic metre front end loaders loading into Haulpak trucks carrying either 120 or 170 short tons. ⁽¹⁾

RAIL

The joint venture operates 190 km of heavy haul railroad between the mine at Pannawonica and the processing/port facilities at Cape Lambert.  Railing is scheduled as a 5 day, 3 shift, 6 train per day operation.  Each train consists of four 2,700 kilowatt locomotives with 150 ore cars carrying 15,000 tonnes per train.  Daily railed tonnage is between 80,000 and 90,000 tonnes.  The track is standard gauge using 68 kg rail.  The rolling stock fleet consists of eleven 2,700 kilowatt diesel electric locomotives and a fleet of 761 ore cars of 103 tonnes capacity each.

SINTER FINES PROCESSING PLANT

Since the joint venturers ceased producing pellets in 1980, only sinter fines have been produced.  The crushing plant at Cape Lambert was originally designed to process 8.4 Mt per annum but due to successive upgradings its rated capacity has been increased to 20 Mt per annum.  Run-of-mine ore is discharged by a rotary car dumper into a primary crusher that reduces it to 200 mm in size.  Subsequent crushing and screening reduces it to less than 9.5 mm.

The fines are conveyed to one of three stockpiles, each of which has a capacity of 3.2 Mt.  Stockpiles are served by two stackers.  There is a single reclaimer operating at 6,000 tonnes per hour.  If necessary ship loading can be carried out directly from the plant, bypassing the stockpile and reclaimer.

HARBOUR AND SHIP LOADING

Harbour facilities are located at Port Walcott and constitute the largest ship loading capacity in Australia.  The ore loading facilities consist of an open pile structure 281 metres in length, reached from Cape Lambert by an open pile trestle 2.3 km long which carries a 6,000 tonne per hour conveyor system and a light roadway.

Ships have free sailing water to within close proximity of the wharf and only need tugs for turning and positioning.  Line boat and tug services are provided to the joint venture by a subcontractor.

TOWNSHIPS

The joint venturers constructed the townships and all associated facilities and retain responsibility for the maintenance of the townsites.  It provides fully airconditioned rental accommodation for all its employees:  a house for an employee with a family or single accommodation for an employee without a family.  The housing is modern and is comparable with modern housing in many Perth suburbs.  The cost to each employee of housing, power, water and rubbish removal is subsidised by the company.  Accommodation charges have been part of the general negotiations between unions and management on industrial matters over the years and are taken into account by the Industrial Relations Commission of Western Australia (the Commission) in making an award. ⁽²⁾

The joint venturers also make cash contributions for each employee to a medical benefit scheme, an employee provident fund, an educational bursary scheme, travel assistance for annual leave and sickness and accident insurance cover.  A free air-conditioned bus service is provided to take employees to and from work and employees may on occasion use the site plane free of charge.  These and other employer-provided benefits are subject to Fringe Benefits Tax payable by the employer.

POWER SUPPLY

Electric power is generated for the Robe mining and shipping operations and the associated townships.  By agreement with the State Energy Commission the joint venturers also provide power to Port Hedland, Karratha and Goldsworthy.  In 1984-85 the joint venturers converted the main power station to gas at a cost of some $20 million including a pipeline.

OWNERSHIP OF THE JOINT VENTURE

There were initially seven participants in the joint venture, with various proportions spread between Australian, American and Japanese interests.  An Australian public company called Robe River Limited had a 35 per cent interest in the project from 1972 until December 1983.  Cliffs Western Australian Mining Co. was the joint venture manager and owned 30 per cent of the project.

In December 1983, Peko-Wallsend Limited took over Robe River Limited and acquired its 35 per cent interest in the joint venture.

In January 1986, Peko acquired a majority interest in Cliffs Western Australia Mining Co. Pty Ltd, the company which managed the joint venture.  That interest, together with the 35 per cent interest previously acquired brought Peko's total interest in the joint venture to 50.9 per cent, giving it the right to manage the project.  Japanese companies owned 45.5 per cent and other investors 3.6 per cent. ⁽³⁾  In March 1986 CWAM was renamed Robe River Mining Co. Pty Ltd.  With one exception, however, the CWAM top management remained in their positions until 31 July 1986.

TERMINOLOGY

In this book management actions before 31 July 1986 are referred to out as carried out by "Cliffs", and those after that date by "Robe".  In describing the workforce, it is necessary to distinguish between the tradesmen and unskilled workers on the one hand, and those employed in a professional capacity or to carry out supervisory functions on the other.  The former will be referred to as the "workforce" and the latter as "staff".

Before dealing with relations between staff and workforce, it is first necessary to say something about the unions to which the workforce belonged, and union representation of the workforce at State and workplace levels.  That is the subject of the next chapter.

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THE WORKFORCE AND THEIR UNIONS

Cliffs maintained a closed shop.  Union subscriptions were deducted from each worker's pay packet and forwarded to the union concerned.

There were seven unions.  The principal union for tradesmen was the Amalgamated Metal Workers and Shipwrights Union (AMWSU).  Its members included mechanics, mechanical fitters, metal tradesmen generally and some other categories such as servicemen (to whom reference will be made later).  Its members are part of a Federal union with membership of 160,619 in 1987 and assets listed as $18 million.  Unskilled workers generally belonged to the Australian Workers Union (AWU), a union with a Federal membership of 138,207 and assets listed at $18.8 million.  Electricians and electrical workers belonged to the Electrical Trades Union (ETU) with a Federal membership of 84,944 in 1987 and assets listed at $11.8 million.  Engine drivers and operators of machinery in power stations and elsewhere belonged to the Federated Engine Drivers and Firemen's Union (FEDFU), which has subsequently merged with the Building Workers Industrial Union in Western Australia to become the Construction, Mining and Energy Workers Union (CMEU). ⁽⁴⁾

These four were the major unions involved.  The rest of the workforce belonged to the Western Australian Carpenters and Joiners, Bricklayers and Stoneworkers Industrial Union of Workers, the Operative Painters and Decorators Union of Australia or the Plumbers and Gasfitters Employees Union of Australia.  These unions did not have a major role in the dispute at Robe River because of their small membership and strategic unimportance. ⁽⁵⁾

All seven unions were affiliated to the Trades and Labor Council of Western Australia and to the Australian Labor Party.  In addition they were grouped in the Mining Unions Association of Western Australia whose President is the colourful AMWSU Secretary, Jack Marks.  With Labor Governments in power in Perth and Canberra their political influence was at its greatest. ⁽⁶⁾

Each union had site representatives called shop stewards.  The senior site representative for each union was the site convenor.  Each convenor had to deal with a committee of shop stewards each of whom had his own view and ideologies.  Inevitably this meant that power relations between convenors and shop stewards would vary from time to time.  The power relationship between a shop steward and the members he represented could also vary from time to time.  Similarly, relations between union groups would sometimes be harmonious and sometimes not.  The relationship between shop stewards, convenors and the workforce and relations with management are matters which are best considered in relation to the events leading up to the 1986 dispute.  This will be considered in the next chapter.

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INDUSTRIAL RELATIONS -- HOW CLIFFS DID IT

We've got the right to strike, bruvvers;
And we've got the right to work.
And we've got the right to go on strike
For the right to go back to work.
And we've got a right to the money
We would have earned when striking.
And the overtime we could have got
Is ours for the taking.

Jeremy Taylor, "Prawns in the Game"

Initially, industrial relations were regulated by the Iron Ore Production and Processing Award 1969 which bound all employers in the iron ore industry in respect of employees employed in the callings it specified.  An award covering an industry in that manner is an example of what is known as a "common rule".  The Award was binding in law and its terms could not be contracted out of. ⁽⁷⁾  For Cliffs and its employees, the Award was replaced on 8 May 1972 by a registered industrial agreement, the Cliffs Robe River Iron Associates Agreement 1972, which had the same binding effect as an Award. ⁽⁸⁾  Further industrial agreements followed and on 26 April 1979 the CRRIA Iron Ore Production and Processing Agreement 1979 was registered with the Commission as Industrial Agreement No 10 of 1979.  This Agreement was varied from time to time to cover regular increases in wages in accordance with State wage determinations and reductions in working hours, and was the primary document setting out wages and conditions of employment of Cliffs employees. ⁽⁹⁾  Cliffs and union site representatives also entered into a number of unofficial agreements, arrangements, deals and work practices.  Unlike the Industrial Agreement, these were not legally binding, but they were followed in practice.

In the early days of the operation, there was a large capital debt to service, successive weak Australian partners with difficulties meeting funding requirements and a Japanese partner which wanted ships to be loaded quickly.  Management's response was to seek to remove any industrial relations problem as quickly as possible.  This led to easy concessions to unions' demands.

When an industrial relations decision was likely to be opposed by union delegates and result in industrial action, decisions based on short term expediency were often made by Cliffs' executive management in Perth, overriding the operation's management at Wickham for "commercial" considerations.  Unions, and particularly union delegates in Cliffs' workforce, quickly understood that management would readily grant concessions to avoid a stoppage of production or ship loading.  Union delegates took advantage of this situation to insist upon a number of restrictive work practices.  The result was that staff members had little control over the workforce they were supposed to supervise.  Overmanning and feather-bedding grew.  Management morale was very low.

This is confirmed by the remarks of former Chief Commissioner Collier:

[O]ver a long period of time during the days of full employment and assumed national affluence the power and influence of the local convenor/shop steward grew and his growth was nurtured by the willingness of the employer to reach an accommodation when industrial action had occurred or was more than likely to occur.  The records of this Commission reveal that on many occasions arbitration on issues became necessary, but in those instances where industrial action affected production or a ship sailing, in my experience "commercial decisions" were taken which usually found favour and agreement with the unions. ⁽¹⁰⁾

RESTRICTIVE PRACTICES

A restrictive work practice can be defined as a work practice that is not justified on the grounds of efficiency or the safety, health or welfare of an employee.  It would take a separate book to describe all the restrictive work practices that existed.  A notice from the company to its employees of 31 July 1986 asked, "Are you aware that at the mine, railway and port there are over 200 restrictive work practices in force?" ⁽¹¹⁾

The work practices which the unions wanted the Commission to restore in fact totalled almost 700 differently identifiable issues. ⁽¹²⁾  A few examples will suffice:

• The appropriate union convenor had to be given five days' notice before a contractor could be engaged to work on site.  The company often needed to engage a contractor to carry out work (e.g. construction), which was outside the scope of work carried out by the workforce generally.
• Together with this there was an arrangement for "side by side" overtime.  Where a contractor performed work on the site, the company's employees were required to be paid as if it were they who had performed the work. ⁽¹³⁾
• Another practice was the requirement that staff should not carry out the work of wages employees, a requirement that was insisted on rigidly by the unions.  Some examples of this will be given in describing the events of May 1986, which led Robe to change the management and industrial relations policy on 31 July 1986.  The basic grounds for it were that the unions did not want staff people carrying out the tasks of wages workers who were on strike but, as will be seen, it went much further than that.
• The overtime roster system required that individual workers be called out in turn for overtime.  Where a worker missed his "turn", that worker would be paid for the hours worked by the person who actually did the overtime.  This was extended to mean that if one person got overtime during a given period, then everyone else should be entitled to it as well regardless of whether the work was there or not.  On occasion it resulted in numerous workers being paid for overtime not done, under threat of black bans. ⁽¹⁴⁾
• Closely related to the overtime rosters arrangement was the policy of "one job -- one call out".  This meant that when a worker was called out on overtime to do a job he was paid a minimum of 4 hours overtime.  If 3 jobs were required to be done, even though they might take a total of 15 minutes, the worker would be paid for 4 hours at double time for each. ⁽¹⁵⁾

In addition to maintaining a closed shop and collecting union subscriptions, Cliffs agreed to union meetings being held during working hours without loss of pay to the employees, and also paid for shop stewards' meetings.  Five, at times six, of the site convenors worked full time on union business, with their salaries paid by Cliffs.  Cliffs also provided them with offices with filing cabinets and telephones together with fuel, car maintenance and other benefits.  In referring to Mr Dawkins, an AWU convenor, Mr Commissioner Halliwell said:

He has been a full time convenor for the AWU on site almost continuously since May 1976, does no other work but union work and is housed and paid by the company.  He cannot claim ignorance of his union rules, the Industrial Agreement by which his union is bound or the Memorandum of Agreement relating to industrial relations procedure.  From the evidence of this man and from his general demeanour in the witness box, I am convinced that he gives the type of leadership which is neither in the best interests of industrial relations on site nor of the Australian Workers Union. ⁽¹⁶⁾

The AWU at National and State level is generally regarded as a moderate union.  However, AWU convenors and site delegates at Cliffs were very militant.  In any conflict between an AWU site convenor and an official from the union's head office in Perth, the convenor was likely to have his way.  The company claims that convenors "ruled the roost" and could always override supervisory staff with threats of industrial pressure. ⁽¹⁷⁾  A full-time convenor paid by the employer for doing nothing but union work is a foolish practice, which exists elsewhere in the Pilbara.  It was resorted to by a weak management as part of a policy of peace at any price.

Mr Commissioner (now Senior Commissioner) Halliwell, a Commissioner with specialised knowledge of the iron ore industry, dealt with Cliffs' industrial relations from the early days of the operation.  Any industrial dispute at Robe was automatically referred to him until four months before 31 July 1986, when his role was taken over by Mr Commissioner (now Chief Commissioner) Coleman.  Halliwell soon understood Cliffs' policy of maintaining the flow of ore at all costs.  It is a long standing policy of Industrial Tribunals in Australia not to interfere with the right of management to manage its operations efficiently and economically but they will limit this right for considerations of safety, welfare and the work load of the employees. ⁽¹⁸⁾

However, Halliwell often made Orders or recommendations limiting Cliffs' managerial prerogative.  When he did so he expected the company to accept his decision and not to appeal against it even though it was obvious an appeal would succeed.  In doing so, he was acting in accordance with his perception that management saw maintenance of output as the only priority.  No doubt he saw little point in deciding to uphold management prerogative when he knew from previous experience that such a decision would not be supported by a firm management.

As disputes became increasingly involved with operational and management matters, Commissioner Halliwell's involvement in these issues expanded, and the Commission's interference with management affairs grew.  Frequently the Commission's decision would be to resolve disputes in a manner that was acceptable to a particular union delegate.  This could be done by the Commission issuing an order with legal effect.  For example, an Order of Halliwell's enforced an overtime roster system at Cape Lambert, which will be discussed below (and which formed the basis for some of the work practices mentioned above).

If management maintained that it would strongly oppose a union claim, the Commission would be suspicious.  The Commission was often proved right when, after maintaining initial resistance, the company would concede a claim after a few days of lost production.  As Commissioner Halliwell said:

I am likewise compelled to say to the principal Respondent [i.e. Cliffs] that by adopting a certain "laissez-faire" approach to industrial relations it appears to have made a rod for its own back.  That, of course, is its own business, but if it wants to utilise the provisions of the Act, and involve the Commission in its disputes, it has an obligation to accept and maintain the decisions that are given. ⁽¹⁹⁾

Commissioner Halliwell was telling Cliffs that it had an obligation to the Commission not to cede more than the Commission had decided.  As has been shown earlier, in his comment on AWU convenor Dawkins, Commissioner Halliwell had also criticised union behaviour in operating outside the procedures to be followed in the settlement of any dispute. ⁽²⁰⁾

Cliffs policy, which endured until July 1986, was one of joint consultation.  It is reflected in the company's Foreman's Manual, Clause 8.1.2 of which contains the following:

It is a company policy that where a decision affecting a group of employees is to be made, all endeavours should be made to consult the employees with the involvement of their shop stewards and convenors as appropriate prior to the decision being made. ⁽²¹⁾

Cliffs tried various panaceas.  It engaged outside "consultants" to advise it on methods of improving industrial relations and management practices.  It followed those who recommended an increase in employee participation.  It did not follow one that recommended firm management, because it feared this would result in a confrontation with the unions.

A joint steering committee consisting of representatives of management and workforce was established and this continued to meet regularly.  From May 1982 Cliffs held quarterly communications meetings at which senior company executives told State union officials, site delegates and a number of staff about a range of topics including production, overtime, the market and the company's future plans.  In time the joint steering committee was expanded to include all site convenors and other site union representatives.  Quarterly communications meetings continued until 31 July 1986.  At the lower level, company officials established working parties with members of the workforce.

When Peko-Wallsend took over Robe River Ltd in December 1983, and with it a 35 per cent interest in the joint venture, Cliffs management remained in control.  According to Peko:

In the course of 1984 Peko management made an assessment of employment levels at Robe River, by comparison with a variety of similar projects elsewhere in Australia, and overseas.  It was confirmed that over-employment [sc. overmanning] was indeed considerable and at all levels throughout the project.

This assessment was discussed with the management of the project, who rejected Peko's conclusions, and instigated their own assessment using a firm of management consultants.  Peko was subsequently told that the consultants had confirmed the project management's views.  However no report was ever made available for Peko to study.

At all times the project management was at best very reluctant to allow Peko to pursue its own investigations into employment matters, or to discuss what were termed to be "industrial relations sensitive matters", particularly at the work site or with employees or union officials. ⁽²²⁾

Neither Peko's assessment nor the consultants' report is available.  Figures supplied by Robe, which will be referred to later, show, however, that since the 1986-87 confrontation there has been a considerable increase in production with a considerably reduced workforce.  This later evidence supports Peko's claims.  It was somewhat paradoxical that Cliffs surrendered much of their management prerogative to the unions and the Commission, but resented any criticism or involvement of the Australian joint venturer.

Problems in the iron ore industry led Federal and State Labor Governments to join with the iron ore companies and senior State union officials to form an Iron Ore Consultative Council (ICC), comprising representatives from employers, unions, site workforces, and Federal and State governments.  The ICC held its first meeting in October 1984, and subsequently established subcommittees for economics, health, safety and welfare, manpower, planning and technological change.  The ICC was not popular with union site representatives at Cliffs.  All union stewards employed by Cliffs at Pannawonica refused to participate in the ICC.  On one occasion the workforce at Pannawonica, except for AWU members, struck for 24 hours in protest because Cliffs had released employees to attend a meeting addressed by ICC representatives about their findings from a recent trip to Brazil.

Little came of these panaceas as can be seen from the lost time statistics (see chart below).

Output, wages workforce, and lost time at Robe River, 1985 to 1989

Note:  Prior to August 1986, "lost time" does not include bans, limitations, refusal of duties, time for some 18 full-time and 120 part-time union representatives on site, meetings with union convenors and other groups, or the staff time required to deal with these complications.  Robe estimates that hours actually lost were "at least four times higher" than the Cliffs figures show.  From August 1986 on, Robe counted all lost time "regardless of reasons".

Source:  Robe "Industrial relations lost time statistics", December 1989.

When Peko acquired a majority interest in the joint venture in January 1986, there were fears in union circles that it would lead to a tougher industrial relations policy.  Peko informed the State Government and its partners in the joint venture that no changes would be made for the time being.  In a quarterly communications meeting in early February 1986, Cliffs' Chief Executive, Mr Koontz, told union representatives that if they wanted the current management with its existing industrial relations philosophy, they should cooperate to make the project a success.  He said, "But if you want your worst fears to come true -- let Peko come in and change it all -- just keep going the way you're going."

At that time the joint venturers were about to start an additional "optimisation programme", to increase output to 18 Mt (from a facility with a rated capacity of 20 Mt).  This involved estimated capital expenditure of about $60 million over the following 18 months, in order to meet customers' indications of additional purchases of iron ore.  It included large expenditures thought necessary to overcome inefficiencies caused by concessions to union demands.  The latter expenditure had been planned because management believed it could not afford to challenge union power.

In late 1985 Cliffs had acquired the additional ore reserves from BHP which had been urgently needed for the early 1990s and beyond.  These would require major capital investment which would have to be serviced out of additional sales revenue.  Japanese customers were not interested in further purchases unless the company could maintain a substantial stockpile of ore at the port.  Although this was explained to union delegates, they were unwilling to agree because they feared it would reduce their industrial leverage.  Some delegates told management that the unions would never allow the company to build a stockpile at the port.  Obviously a substantial stockpile of ore at the port would enable Cliffs to continue loading ships while the stockpile lasted, even though strikes in other parts of the operation had stopped the delivery of ore to the stockpile.

The six months to August 1986, which coincided with award negotiations, were disastrous, with selective industrial bans and limitations causing substantial disruption to production.  As Commissioner Gregor was to observe:

There is evidence that the Company was concerned that between March and June, 1986, the industrial conduct of some workers on the property had been such that production had been interdicted to an extent that the operations had become unprofitable.  The interdiction was not so much in the form of stoppages of work, but took the form of work restrictions, bans or limitations which were placed by some members of the workforce in furtherance of particular claims they had from time to time.  In other words, the company was forced to suffer loss while these workers were able to continue to earn at their normal rate of wage. ⁽²³⁾

The 1986 round of industrial negotiations commenced, and it was clear that the unions had two main objectives:

• to incorporate many of the benefits negotiated outside the Industrial Agreement into the Agreement;
• to obtain vastly improved redundancy benefits.

The first item reflected the unions' fear that Peko would take over management of the project and withdraw benefits that were not included in the Agreement.  In May 1986, Peko's Industrial Relations Manager, Herb Larratt, attended the negotiations as an observer.  Representatives of both Cliffs and the unions were hostile to his presence.  When asked about Peko's attitude to restrictive work practices, he said "Nothing is forever".  Later he told unions that Peko was committed to eliminating restrictive practices.  His comments led to fears expressed by union representatives at a subsequent conference before Commissioner Coleman.  Commissioner Coleman referred to these fears as "Peko paranoia".

Cliffs' management remained unaffected by Peko paranoia.  They tried to reach agreement with the unions on the terms of the Industrial Agreement.  A major area of difference was redundancy benefits.  Cliffs tried to reach agreement by offering redundancy benefits which they considered better than those available from other iron ore producers.  Cliffs believed its offer was very generous and that state union officials would recommend its success.  However, many site delegates thought it was not good enough.  The offer was rejected by union membership at both Cape Lambert and Pannawonica, but the company kept it open until it was withdrawn on 31 July 1986.

The unions had long maintained a ban on staff members doing the work of wages employees.  Even though it was carried to ridiculous lengths, the company acquiesced.  It was an ETU protest and strike over a staff member doing wages work that prompted Peko to take action which led to its taking control of the management of the project and introducing new management policies.

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THE POWER SWITCH

The company operates and controls the power stations and sub-stations that provide electricity to the company's operations and to the whole Pilbara power grid which supplies towns including Wickham, Karratha, Port Hedland, Roebourne, Point Sampson and Dampier.

On 28 May 1986, a sub-station fault caused all alternators to "trip".  Power to the community was temporarily cut off.  Power-house superintendent Ray Knapp went to the sub-station and pressed a switch, resetting the circuit breaker and restoring power to the community with the minimum of inconvenience.  He was well qualified to do the job and had done it in the power-house control room on many occasions without any objection.

However, the ETU had successfully maintained for many years that only an ETU tradesman was entitled to reset a circuit breaker in a sub-station.  It would have been inconvenient to the company and the community for Ray Knapp to find an appropriate tradesman to reset the circuit breaker because the ETU were taking part in a 24 hour strike as part of an ACTU national day of protest against delays at the hearing in the Federal Commission of claims for a 2.5 per cent CPI wage increase and 3 per cent superannuation.  There was no certainty that the ETU would have cleared the job and allowed someone to reset the switch.  If the ETU had been willing to clear the job it would have taken some time before power was restored.  In the circumstances Ray Knapp had acted prudently and sensibly.

The ETU representative nevertheless told management that Knapp should have called in an ETU member to press the switch, notwithstanding the delay this would have caused.  The union demanded that Knapp be disciplined with a 5 day suspension for performing wages work.  The company conceded the ETU demand in part and suspended Knapp for 2 days.  ETU members went on strike for 6 days claiming that the suspension was inadequate.

In the previous week, engineer Peter Long could not start his company vehicle at home due to a flat battery, so he used jumper leads connected to the battery of his private car to start his company vehicle.  When the ETU became aware of what he had done they demanded that the company suspend him for 5 days without pay for doing wages work.  They claimed that jump-starting motor vehicles was exclusively the work of auto electricians.  The company suspended Peter Long for 2 days without pay and the ETU went on strike for 2 days in protest at the inadequacy of the suspension.  The Daily Commercial News reported that

These two strikes have held up 3 ships bound for Japan with iron ore at a time when Japanese iron ore mills have just cut the price of iron ore by 4 per cent at Mount Newman.  Australia's iron ore share of the Japanese market [sc. share of the Japanese iron ore market] fell by 3 per cent last year to 44 per cent following aggressive marketing and price cutting by Indian iron ore mines.

Clearly unless there is an improvement in this industrial relations record, iron ore exports to Japan could be expected to drop even further. ...

However, it is understood ongoing industrial relations problems and numerous strikes are also occurring at Mount Newman and at Hamersley.

But these larger companies are able to continue loading as their stock piles are larger.

[emphasis added] ⁽²⁴⁾

The suspension and punishment of Ray Knapp increased Peko's concern.  It sent twelve staff members to investigate every aspect of the project.  Their report convinced Peko management that the situation was appalling.  That assessment found confirmation in evidence and comments in later proceedings before the Commission in Court Session.  Mr Commissioner Coleman (as he then was) observed:

On the assessment of the Respondent's mine manager during the period from March through to July, 1986, the imposition of bans, limitations and restrictive practices by employees saw productive capacity at the Robe River enterprise drop by 30 per cent.  However, the detriment suffered by the Respondent was not reflected in any notable hardship experienced by the workforce.  Only 3 per cent of working time was lost by the employees. ⁽²⁵⁾

The situation was so serious that Cliffs' General Manager Operations, Mr J.C. Emery, issued a 48 hour notification of stand down to the combined unions' committee at Cape Lambert and Pannawonica, to inform them that unless a return to continuous production from the mine through to the port could be re-established without threat of further disruption by 9.30 a.m. on 19 June 1986, the whole operation would be progressively stood down as useful work ceased to be available.  The notice contained the following passage:

Due to the continuing disruption due to industrial disputes since early March this year we are now in a position of no stockpiles at Cape Lambert, a pattern of disruption which prevents us from economically continuing production and a complete loss of confidence by our customers which is affecting future sales. ⁽²⁶⁾

Documents tendered as evidence to the Commission in Court Session illustrate the attitude of local union representatives.  A letter to Cliffs on AMWSU notepaper, dated 5 December 1984, contained a number of motions, one of which was:

Motion 1:  Any staff member doing AMFSU work will be black-banned for life. ⁽²⁷⁾

A letter dated 12 November 1985, presented by the local ETU representative to Mr B.M. Abrahams, Acting Manager, Employee Relations, Cape Lambert, said:

Dear Sir,

At the conclusion of an ETU meeting held today it was agreed by our members for me to notify the company of the following conditions:

Because of the attitude shown to refrigeration workers by power station staff personnel the air conditioning unit supplying the power station offices has a maintenance ban until 1 April, 1986.  ETU members will remain in dispute until 3 p.m. Wednesday, 13th November, 1985. ⁽²⁸⁾

An AWU notice read:

AWU members take note that of 1900 hours on Sunday 4th May, 1986, a safety ban is in effect on the issue of stores from the warehouse yard during the hours of darkness.  Signed Noel Nielsen, AWU Safety Rep. 4th May, 1986. ⁽²⁹⁾

In the warehouse log for 21 May 1986, the following appeared:

Nightshift:  Instructions were given that appear to be in direct contravention of a safety ban placed by myself on 4th May, 1986.  It concerns me that a member of your staff, M. Innes, should have this attitude and I have duly recorded and reported the same to the AWU convenor, Mr M. Robson.  I request that you address these problems as a matter of urgency.  Signed N. Neilsen, AWU Site Safety Rep. ⁽³⁰⁾

Two motions from an AWU meeting on 2 May 1986 said:

Motion 1:  The AWU warehouse stores persons will not have any further dealing with A. Leber on industrial relations matter [sic] as from 0700 hours 2 May, 1986.

Motion 2:  All locomotive camshafts are totally banned until such time as there is a different stock number between the new ones and the reconditioned ones.

Signed G Acosta, Shop Steward. ⁽³¹⁾

There are other examples.  A number of restrictive practices were revealed by the investigation carried out by Peko.  The number was referred to as over 200 in the company's notice of 31 July 1986. ⁽³²⁾  In fact Robe's management was not even then aware of the number of restrictive practices.  This is clear from the following exchange between the then Chief Commissioner Collier and Mr Don Moss, an industrial advocate for Robe, during proceedings before the Commission in Court Session:

Collier CC:  But you know all the things which have been in operation, all the restrictive practices and documents and the like because they were the things about which you complained and which you unilaterally determined will no longer apply.  You must have known what you were terminating although I doubt it.  I am serious when I say I doubt it.  I do not really believe -- I am speaking for myself -- that you did know.  Most of the stuff came out of the woodwork through the efforts of the union so the discovery was done for you.

Mr Moss:  I think that is probably fair comment. ⁽³³⁾

As part of the registered Industrial Agreement, Cliffs had agreed that before it could engage a contractor at Cape Lambert it had to give 5 days' notice to the convenor of the union concerned.  By "agreement" this was extended to all areas of the workplace.  In practice it came to mean that before a contractor could be engaged the company had to obtain union approval.  One of the conditions of union approval was that the employees of the contractor belonged to the "appropriate" union.  This led to demarcation disputes.  On one occasion Cliffs engaged a contractor to carry out repairs on some cyclone damage at the railroad near one of the old mines.  The drivers of trucks that were to bring in the crushed rock for the ballast had Transport Workers Union (TWU) membership.  The AWU at the mine insisted that the company use AWU operators on that.  On building construction works at the mine, a concrete truck driver was a TWU member.  Again the AWU insisted that he hold an AWU ticket.  Riggers on buildings were a Builders Labourers Federation (BLF) classification, as is normal in the construction industry.  The AMWSU insisted that he hold an AMWSU ticket because that was the coverage under the Industrial Agreement.  For refrigeration work by contractors, the AMWSU had construction industry coverage but the ETU insisted on ETU coverage because that was the coverage under the registered Industrial Agreement.  Invariably the company had to "double-ticket" contractors' employees just to keep the peace.  (Double-ticket means to pay the subscription to the second union so that the employee has membership of two unions.) ⁽³⁴⁾

In an emergency, the practice of obtaining union approval for the engagement of a contractor could have had dangerous consequences.  On one occasion there was a leak in a petrol pipeline at Cape Lambert.  It was in a culvert which ran under an access road and was blocked off at one end by concrete.  At the other end, fuel was leaking.  The company had its normal safety fire staff there.  It was necessary to excavate round the culvert using a backhoe.  The company had no backhoes on site and needed to engage a contractor with a backhoe.  Before the contractor could start work the company needed to obtain a signed approval from the AWU convenor.  The AWU convenor was away and it was several hours before the company was able to obtain an AWU representative who was willing to sign and agree that the work should be done by contract. ⁽³⁵⁾

In early 1986 Cliffs let a contract for screening an excess stockpile to a contractor.  This necessitated the offering of side-by-side overtime to members of the AWU before the project could proceed.  There were five contractors involved and Cliffs was obliged to provide one AWU member for each of the contractors' men with overtime for 24 hours a day for a period of about 6 weeks.  The cash costs for that overtime exceeded $100,000. ⁽³⁶⁾

At Cape Lambert, the company wanted to install remote release ship hooks, the hooks by which the ship is secured to the wharf.  The job was done manually and required ten people on the union's insistence.  Their job was to climb 10 to 12 metres down a ladder on to wharf fixtures known as dolphins to release the ship, and stand on the dolphins as the lines were being released.  In June 1985, Cliffs let a contract to a supplier for the installation of remote release ship hooks.  If these were installed and used ships could be released by one or two people at the direction of the pilot as he was about to sail the ship.  Obviously, this would be a more convenient and efficient process.  The AWU would not agree to the system being put into operation.  When the company brought experts from Melbourne to measure up the hooks and inspect the site they were not allowed on to the wharf by the AWU.  The company had to fly the experts back to Melbourne because they had other appointments and could not be left standing around while the company tried to negotiate to get them out on the wharfs.  The company decided not to proceed with the electrical side of the contract although it had already purchased the electrical equipment.  When management changed on 31 July 1986 and decided to go ahead with the electrical part of the contract, the price had risen to $580,000 from an original price of $450,000. ⁽³⁷⁾

The side-by-side arrangements as interpreted by the AWU at Cape Lambert were that if a machine was brought on to the site that was similar to any machine regularly on site, the company had to provide a man on overtime to sit in the crib room and do nothing while that machine was on site.  If the company wanted to operate two bulldozers, it needed two men for each bulldozer (as a result of an agreement between the company and the AWU registered with the Commission) and then four men for the side-by-side.  If something occurred that required another job done, the foreman would have to call another man out on overtime to do it.  Alternatively, the foreman would have to "convert" one of the side-by-side men to normal duties, which meant payment of an additional call-out for that man. ⁽³⁸⁾  As will be seen, payment for a call-out would be a minimum of four hours at double time regardless of the length of time it took to complete the job.

Cliffs had employees classified as "servicemen" at Pannawonica.  A serviceman's job was to lubricate vehicles and machinery and to charge the compressed air systems on Haulpaks.  Most of the "serviceman" positions have since been abolished by Robe, which considers that there is no need for a separate classification and that the work can be done by a mechanical fitter as part of his ordinary duties.  The AMWSU failed in an attempt to persuade the Commission to restore the classification. ⁽³⁹⁾

The AMWSU had a policy of one job, one call-out.  Neil Flynn, an AMWSU witness, conceded that one serviceman received 12 hours' pay at double time (i.e. 24 hours' pay) for three tasks which were all completed within 15 minutes. ⁽⁴⁰⁾  Another example was the case of two servicemen, Mr Hanmore and Mr Healy, who pumped up the air reservoirs of three Haulpaks each.  This took each of them 15 minutes for which each received 12 hours' pay at double time. ⁽⁴¹⁾

As mentioned above, the company was required by an Order of Commissioner Halliwell on 21 June 1979 to create a roster system to operate at Cape Lambert. ⁽⁴²⁾  Rosters had to be drawn up and made available to workers in each section plus shop stewards, convenors and such others as were necessary.  The Order provided that if there was a mistake in the application of the roster so that a worker was denied overtime in his turn, that would be deemed to be a breach and that worker would be paid the same number of hours worked by the person who worked the overtime in his place.  In due course and by "agreement" between the company and the unions the overtime roster system was in operation for the whole workforce.  There were difficulties of equalising overtime in shifts containing mixtures of various disciplines and trades.  The ETU added to the difficulties by insisting that whenever there was a requirement to call out an electrical tradesman, an electrical trades assistant had to be called out as well regardless of whether he was required or not.  Like the AMWSU, the ETU also had a one-job-one-call-out policy.  While the company accepted the principle that overtime should operate on a fair and equitable basis, the system under which it operated gave rise to many incidents of pay for work not done.  The way it worked was that if one person got overtime during a given period then everyone else was paid overtime regardless of whether the work was there or not. ⁽⁴³⁾

These are only some examples of the restrictive practices existing throughout the whole mining and shipping operation.

The Peko action plan was put into operation by the management company on 31 July 1986.  Robe's actions on that day and subsequently challenged much of the conventional wisdom about industrial relations in Australia.  It was to reject the conventional wisdom that industrial relations is best conducted by management and unions getting together and negotiating or conciliating.  It was to show that it regarded the system of compulsory arbitration as a major hindrance to efficient industrial relations.  It was also to end the style of management following a policy of peace at any price in conceding unreasonable union demands.  How it did so will be described in detail in the next chapter.

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THE POWER SWITCH FROM UNIONS TO MANAGEMENT

On 31 July 1986, Robe dismissed most of its senior management and replaced them with new men.  The same day, the new General Manager Operations, Mr McRae, issued a notice to employees that restrictive work practices were at an end.  Employees would be required to do any work which they were competent to perform.  There would be a review of the number of employees required and other matters including shift arrangements, the use of contractors and off-site facilities.  The notice contained the following passage:

Management decisions will be made by management.  Any previous arrangements, understandings and expectations that such matters may need the endorsement of unions before implementation shall have no further effect. ⁽⁴⁴⁾

In a letter dated 31 July to the State officials of the unions representing the workforce, Mr McRae wrote:

Disciplinary/Industrial Procedures

Any disciplinary/industrial procedure, arrangement, understanding or agreement other than Industrial Agreement No 10 of 1979 shall cease forthwith or where required we hereby formally give notice of the requisite 30 days to withdraw.

The procedures to apply henceforth shall be solely determined by the company in accordance with sound management practices. ⁽⁴⁵⁾

Robe management was not then aware of a letter to union representative Graham Young, dated 26 April 1979 and signed by CRRIA's then Manager Industrial Relations (Sites).  This letter agreed to adhere to all oral and written local practices, agreements and arrangements existing prior to 13 December 1978, and undertook not to change them without first seeking conciliatory change with the unions.  According to this letter, only if conciliatory change could not be obtained would Robe reserve its right to cancel them on 30 days' notice.  Nor was Robe aware of a letter written by its former General Manager Operations to the FEDFU, agreeing that, for the life of the present registered Industrial Agreement, it would give 30 days' notice of its intention to withdraw from any local agreement, formalised agreed matter or other written site arrangements. ⁽⁴⁶⁾

Robe was to be criticised heavily for failing to observe these undertakings.

At 31 July 1986 there were a number of uncompleted matters which Cliffs had referred to the Commission.  That day Robe gave notice to the Commission that it was withdrawing all these applications.  At the same time Robe advised the Commission that in consequence of a change of industrial relations policy, the assistance of the Commission was no longer required.  The unions, site delegates and convenors quickly realised that management was prepared to take all steps necessary to re-establish control.  They had before them the example of the sudden sacking of long-established senior executives and complete reversal of policy regarding union participation.  They were surprised and shocked.  Stripped of their long-held power, the convenors and site delegates lost confidence in their old policy of industrial action and hurriedly sought assistance from their State union officials.

On 1 August 1986 the AMWSU filed an application with the Commission for a conference to be held pursuant to Section 44 of the Act.  As the Commission's former President, D.J. O'Dea was to say in other proceedings between Robe and the unions:

Section 44 provides a procedure to achieve settlement by agreement which is initiated by an application requiring the Commission to summons persons to attend at a conference.  Attendance is compulsory and discussion provides the opportunity for amicable settlement.  The matter which is in dispute need not be an industrial matter and no question of arbitration arises in respect of an industrial matter unless at the end of the conference procedure it remains unsettled and the Commission is constituted to hear and determine the matter. ⁽⁴⁷⁾

It is unlikely that the AMWSU applied for a conference expecting to reach amicable settlement of the union's differences with Robe.  It was clear from Robe's attitude that it did not wish to be conciliated and did not want any assistance from the Commission.  This was reinforced by two events.

The same 1 August, a Friday, Robe issued a series of notices to employees altering many long-standing arrangements.  The changes included the abolition of the classification of leading hands and new arrangements for deployment of the workforce.  Accompanying these were offers of voluntary redundancy to reduce the size of the wages workforce which Robe believed was too large.  When Commissioner Coleman convened the conference in Perth on 4 August Robe's representatives made it clear to the Commission that management insisted on exercising its right to manage.  Commissioner Coleman's view was that the status quo should be retained whilst conciliation took place.  Throughout the conference he tried to persuade Robe to discuss restrictive practices with the unions.  It was his statutory duty as a Commissioner to persuade the parties to have these talks.  However, the Commissioner wanted these discussions to take place on the basis that the practices existed currently and that Robe should try to convince the unions or the Commission that they should be removed.  Robe responded by insisting that this was the wrong basis as Robe did not recognise restrictive practices any more, it had no claims to bring and if the unions wanted to reinstate restrictive practices they should particularise their claims and ask the Commission to refer them to arbitration.

On Tuesday 5 August, Commissioner Coleman ordered the parties to restore the status quo existing before 31 July 1986 for a period of 30 days up to and including 30 August.  In his Order he stated his perception that all attempts to settle the matter by conciliation had been exhausted, and that the position would deteriorate unless restraint was exercised by the parties.  During that period there was to be a series of meetings between the unions and Robe, chaired by the Commission, at which the parties would address all matters which the company and the unions might consider affected safe and efficient operations and work practices.  He also ordered Robe and the unions each to prepare a schedule of "agreements", "deals", "arrangements" and "practices" which either came within the ambit of matters affecting the safe and efficient operation of the Company, or which formed part of the "status quo" and which needed to be addressed in those discussions. ⁽⁴⁸⁾  The Commissioner's Order restored the confidence of convenors, site delegates and union officials.  They felt the status quo had been restored and the company had been defeated.  Those familiar with the Commission would recognise that if Robe had followed Coleman's Order to the letter, and restrictive practices were not resolved by 30 August 1986, the unions would have applied for an extension of the "status quo ante" Order and the Commission would probably have granted the extension.  Delays would have worked to the unions' advantage and changes in restrictive practices would have become more difficult to achieve.

On Wednesday 6 August, Robe lodged an Appeal against Coleman's Order and an Application for a stay of the Order's operation.  Robe had meanwhile reviewed the deployment, shift arrangements and classifications of many of the workforce.  Many workers had received notice altering shift arrangements, work places and some work classifications.  However, the effect of the Order of 5 August in the workplace was that some workers refused to accept redeployment and other lawful directions, claiming that the Order entitled them to do so.  The company responded by dismissing employees who refused to obey directions.  The conference before the Commission resumed hearing in Karratha to discuss the restrictive practices and union allegations of Robe's breaches of the Order of 5 August.

At 5.30 p.m. on Monday 11 August, Commissioner Coleman made a number of Orders directed to Robe which may be summarised as follows.  First, the company was required to re-employ without loss of entitlements all employees dismissed after 5 August for refusing to accept changes in classification, work arrangements or work areas.  The re-engaged workers were to continue to be employed in the same classification, arrangement and work area in which they were engaged before the Commission's Order of 5 August.  Again, Robe considered the Commission had exceeded its powers in making the Order arising out of a Section 44 conference and lodged an appeal against it.

Many of the changes involved moving workers to different shifts, largely from shift work to day work. ⁽⁴⁹⁾  Many workers who would have finished the eight-hour evening shift at 11 p.m. on Sunday 10 August were being changed to regular day shift work commencing at 7 a.m. on Monday.  The registered Industrial Agreement required at least a ten-hour break between shifts, so workers being changed from evening shift to regular day shift were told to finish at 9 p.m.  A number of those workers refused to leave the site and had to be removed.  When the 11 p.m. shift started, a large number of people turned up who should not have been present, having been told that under the new arrangement they were on day shift commencing at 7 a.m. the next day.  Management advised them that they were in the wrong place at the wrong time, and a number of them refused to leave the site.  Many workers in both classes were told that they were dismissed for refusing to obey a lawful instruction.  Some had to be removed from the site by police.

When the 7 a.m. shift started on Monday 11 August, a number of people did not turn up because they had attempted to present themselves for work the previous evening.  Others attended for work on that day shift although they were not rostered for it.  Yet others reported to the wrong location notwithstanding that they had been advised to report for work at a new location.  These problems continued through the day shift and into the afternoon shift on 11 August.  There was general confusion about what numbers were on which site.  There were people present who should not have been and people absent who should have been present.  The result was that many people were wandering about work sites in a totally uncontrolled manner.  Apparently this was due to the understanding by many of the workforce of the meaning of Commissioner Coleman's status quo ante Order. ⁽⁵⁰⁾

Statutory responsibility for the safety of the workforce, pursuant to the Mines Regulation Act, was vested in the registered managers of the port, the mine and quarry, and the rail and powerhouse operation. ⁽⁵¹⁾  They had become concerned at the workforce becoming less manageable from day to day and on 11 August 1986 they decided that to allow the operation to continue would make it impossible for them to comply with their statutory obligations.  Consequently, Robe decided to close the operation down.  At 11 p.m. the operations manager gave notice that the operation was closed down and the wages workforce was dismissed forthwith with payment of all entitlements including payment for accrued annual leave and payment in lieu of notice.

The then WA Minister for Industrial Relations, Peter Dowding said in a media release dated 12 August:

The company appeared to be ignoring the welfare of the local community and business by its actions in flouting the rulings of the WA Industrial Relations Commission.

The company is new to the iron ore industry and appears not to understand or are [sic] not prepared to understand the industry. ... The company ought to comply with the Orders of the WA Industrial Relations Commission and work through any industrial problems they have by negotiation in a proper manner.

On 22 August 1986 a Full Bench of the Commission by majority decision upheld Robe's appeal against Commissioner Coleman's first "status quo" Order dated 5 August 1986, and quashed his decision. ⁽⁵²⁾  It was clear from the majority reasoning in the Full Bench decision that Coleman's second "status quo" decision of 11 August 1986 would be quashed on similar grounds, as indeed it was by a majority decision of the same Full Bench on 30 September 1986. ⁽⁵³⁾

The "umpire" had been overruled by a "higher umpire".  Commissioner Coleman had succeeded to Commissioner Halliwell's task of handling disputes in the iron ore industry some four months previously.  Obviously when he made his "status quo ante" Orders he could not have believed that Robe would react in the way it did.  If Robe had behaved the way Cliffs did then his directions about the status quo and conciliation would have been observed, but Robe's actions were unprecedented in the iron ore industry.

Robe was attacked by the outraged media.  The writer recalls a Tour Corners' reporter saying words to the effect that Robe River was a long way from South Africa but the politics were the same.

The Commission in Court Session consisting of then Chief Commissioner Collier and Commissioners Gregor and Coleman commenced to deal with an application by the unions claiming that the changes introduced by Robe on 31 July should not be made.  The unions added to this a claim for reinstatement of the workforce plus compensation for dismissal and for annual and long service leave to be calculated as if the dismissals had never occurred.

On Sunday 17 August 1986, the workforce was offered re-employment with continuity of service.  Each worker who accepted was required to sign an acceptance accordingly and return it to the company before 5 p.m. the next day.  The then Minister for Minerals and Energy, David Parker, attempted to resolve the dispute through negotiations with the company.  Robe accepted the Minister's proposals and notified the workforce accordingly by letter dated 18 August 1986, offering re-employment from 11 p.m. that day on the basis of work in accordance with existing registered Agreements and Awards (but not the old work practices).  The Minister himself was to investigate any questions of unsafe work practices pertaining to the Mines Regulation Act in conjunction with the State Mining Engineer and to make decisions on those in accordance with that statutory responsibility.  The Commission would continue to examine all work practices in dispute and the Minister expressed the hope that the Commission would complete this task as a matter of urgency.  Changes to manning levels resulting from any of this would be dealt with as far as possible within the existing redundancy provisions of any relevant Award or registered Agreement, with any disputes concerning these to be referred to arbitration. ⁽⁵⁴⁾

This Parker/Robe agreement was rejected by the unions.

On 21 August the Commission in Court Session ordered Robe to re-employ the dismissed workforce. ⁽⁵⁵⁾  Robe appealed against this to the Industrial Appeal Court.  This caused an automatic stay on the operation of the Order of the Commission in Court Session. ⁽⁵⁶⁾  Further offers of re-employment were made on terms similar to those made previously.  The Industrial Appeal Court dismissed Robe's Appeal on 3 September 1986. ⁽⁵⁷⁾  Employment resumed.  The Commission in Court Session continued to hear the unions' application to restore the status quo before 31 July 1986, and to deal with the claim for compensation for the period of dismissal plus continuity of employment.

The seven unions were represented by industrial advocates with legal counsel for assistance on points of law.  The Minister for Industrial Relations took part in the proceedings as an intervener.  During the proceedings the unions tendered as "Exhibit 7" letters, memoranda and other documents containing evidence of work practices the unions sought to have restored by orders of the Commission.

Exhibit 7 weighs about five kilogrammes and is part of the record of the proceedings. ⁽⁵⁸⁾  Commissioner Coleman described Exhibit 7 as "documentation listing some 300 arrangements, agreements, deals, undertakings, etc. which they [i.e. the unions] argue were negotiated with the Respondent company, now known as Robe River Iron Associates and which should be retained under an Order of the Commission.  Thirty-two of these items, common to all unions, were submitted for determination in the first instance." ⁽⁵⁹⁾  Coleman found that management philosophy had been responsible for fostering a belief within the ranks of decision-makers in the workforce in their authority to question, and indeed on occasions to dictate, the terms under which the operation would function on a day-to-day basis.  He found that this inhibited the development of sound managerial and supervisory skills within management. ⁽⁶⁰⁾

Commissioner Gregor found that the management style adopted by the company had led to the formation of "bargaining" groups, which were so strong that they could not be controlled by supervision.  He said that the product of this policy was the granting of many rights and benefits which were not available in the iron ore industry, let alone in general industry, and an approach to management which was entirely dependent on prior agreement from the workforce before even the most minor of management tasks could be performed.  He observed that while the company used the facilities of the Commission, the record disclosed that when many cases were subject to argument and the decision of the Commission issued, if the decision did not suit the requirements of the workforce then management would acquiesce to those requirements notwithstanding the decision. ⁽⁶¹⁾  Chief Commissioner Collier's comments were similar.

On 6 December 1986, the Commission in Court Session found for the unions in six of the 32 matters raised.  In one or two others no order or significant comment was made because of no opposition by the company, or because no order was appropriate.  The Commission declined to make orders continuing the overtime roster arrangement, requiring union approval before contractors were engaged, granting leave for trade union training, or providing mid-shift meals to married employees.  A significant union claim which was upheld was for paid monthly stop-work meetings.  An important outcome of the decision was the Order discontinuing all claims in Exhibit 7 apart from the 32 specifically dealt with, without prejudice to the unions' being able to bring them up later. ⁽⁶²⁾  The unions did not subsequently proceed with these claims.  Evidently they thought only a tenth of their work practices were defensible;  and of these, fewer than one in five were upheld by a Commission that could hardly be classed as anti-union.

Given that the proceedings before the Commission in Court Session commenced on 8 August 1986 and the final Order on them was not made until 5 December 1986, ⁽⁶³⁾ it would have taken many times longer to deal with all the work practices in Exhibit 7.  Had Robe sought to remove them by conciliation or arbitration rather than terminating them by notice on 31 July 1986 it would have had to show before the Commission that all work practices referred to in Exhibit 7 were unreasonable.  It is reasonable to speculate that the hearings would still be continuing.

Chief Commissioner Collier was satisfied that the closure on 11 August 1986 was a reasonable exercise of discretion by the registered mine managers having regard to their statutory safety obligations.  However, he found that the situations at both the port and the mine, which caused the closure of both operations, could have been avoided if the company had exercised its prerogative to manage in a reasonable way.

He was very critical of the company's ignoring its obligation to honour the arrangements made with the workforce in the past, and pursuing an obstinate approach which precluded any discussion whatsoever with its workforce, or their representatives, on future relations.  He considered that fairness demanded that all employees be compensated for unfair termination of their employment and assessed the compensation at three weeks' gross usual weekly earnings per employee. ⁽⁶⁴⁾

Commissioner Gregor adopted the Chief Commissioner's conclusions regarding the dismissals. ⁽⁶⁵⁾  In earlier remarks he referred to the history as indicating

a form of industrial relations practice which was, for all intents and purposes, a deregulated collective bargaining system, developed by management which had placed into effect a human resources policy based upon precepts of industrial democracy.  This approach to industrial relations management had led to a situation where it can be said that a group of workers who represented the unions in-house had been elevated to such a position of power that they could be considered to be an alternative management.

He pointed out that

from 31 July the company expected that supervisors who had been subject in some instances to degrading and demeaning treatment in the past by some of these representatives of the unions, were required to all of a sudden apply sound management and supervision skills. ⁽⁶⁶⁾

It was part of Gregor's finding that the company had a right to select the way in which it would deal with its industrial relations affairs, but if it acted without equity and without fairness in the exercise of those rights it should not be surprised if the Commission exercised its authority to redress the unfairness.

Commissioner Coleman considered that, while the circumstances which existed in the operations of the company prior to July 1986 warranted the company administering a short sharp shock, he felt the action should have been complemented by a management programme to ensure the continuation of the enterprise and the establishment of a relationship between the workforce, their representatives, and management based upon mutual respect. ⁽⁶⁷⁾

All three Commissioners found the dismissal of the workforce unfair, and were critical of the company's termination of "agreements" with the workforce abruptly and without warning.

Robe was involved in a number of other proceedings before the Commission in which many important issues arising during and out of the main dispute were dealt with.  A number of these decisions were taken on Appeal.  It was clear that for much of the time there was a conflict between Robe and the Commission.  These issues and the conflict between Robe and the Commission are the subject of the next chapter.

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ROBE AND THE COMMISSION IN CONFLICT

THE DISPUTES

Of the many proceedings before the Commission in which Robe was involved, three will serve as examples of the important conflicts that arose:  they concern the manning of power shovels;  whether employees on strike had abandoned their employment;  and the dismissal of a relief train controller.

POWER SHOVELS

In 1986 Robe used three power shovels at Pannawonica, and employed two drivers to operate each.  In practice one driver drove while the other stayed in the crib room.  They changed places every two hours during a shift.  It was a clear case of overmanning.

On 2 October 1986, Robe told power shovel crews that as from that date each power shovel would be manned by one driver.  The FEDFU applied to the Commission for a compulsory conference under Section 44 of the IR Act.  On 3 October all shovel drivers at Pannawonica reported "sick".  A staff member operated a shovel and this resulted in a mass walkout by AWU production workers on the grounds of "sickness".

Chief Commissioner Collier convened a compulsory conference at which he criticised Robe and directed it to operate shovels with a two-man crew.  He told the company that he would refer any claim by it for a one-driver shovel crew for hearing and determination by arbitration.  The company's advocate told the Chief Commissioner and the FEDFU that Robe would seek legal advice on the power of the Commission to make such a direction, as the company was not seeking to have the matter arbitrated.  The Chief Commissioner responded that his direction had immediate effect, and if the company did not advise him soon about its position he would seek legal advice as to how he could enforce his direction.

On the evening of 3 October, the company told the Chief Commissioner that it would observe its registered Industrial Agreement and the order of the Commission in Court Session, which entitled it to reorganise its manning, and, accordingly, shovels would be required to be operated by one driver only.  The Chief Commissioner said the Commission would probably refer the matter for arbitration, and might make the company the claimant.

On 6 October, the Chief Commissioner reconvened the conference, referred the shovel driver claim for hearing by arbitration, and gave the company a written direction to revert to two-driver operation.  On 7 October, the parties were back before the Commission.  Robe's counsel argued that the Commission in Court Session lacked jurisdiction to order two-man shovel operation as an interim measure pending arbitration.  He relied on the ground that the matter had come before the Commission in Court Session on a Section 44 conference.  Nevertheless, the Commission in Court Session issued an Order directing a two-man shovel operation. ⁽⁶⁸⁾

The company filed an Appeal against the Commission's Order, which had the effect of staying its application.  On 11 November 1986, the Industrial Appeals Court quashed the Commission's Order and held that the Commission had no power at the conclusion of a Section 44 conference to make an interim Order requiring two-man operation. ⁽⁶⁹⁾

Arbitration on the shovel dispute was still pending.  Meanwhile, on 16 December 1986, the workforce at Cape Lambert and Pannawonica went on strike.  On 18 December Robe circulated a letter to its workforce to the following effect:  employees who continued to withhold their labour after 23 December would be deemed to have abandoned their employment with the company of their own free will.  In any event their absence would have broken their continuity of service for the purpose of calculating long service leave, service pay entitlements and, where appropriate, annual leave.  The company understood the registered 1979 Industrial Agreement as entitling it to do this.  The unions applied to the Commission for a contrary interpretation of the Industrial Agreement, and asked the Commission to find that any striking employee who had maintained his withdrawal of labour for seven days had not abandoned his employment.  Commissioner Kennedy upheld the unions' claim. ⁽⁷⁰⁾

Robe appealed to a Full Bench of the Commission which by a majority dismissed the appeal. ⁽⁷¹⁾  Finally, Robe appealed to the Industrial Appeal Court, which on 13 April 1987 allowed the appeal and quashed the decision of the Full Bench and the decision of Commissioner Kennedy. ⁽⁷²⁾  The decision depended upon a legally-binding interpretation of the registered Industrial Agreement which the Industrial Appeal Court had finally given.

"UNFAIR DISMISSALS" -- THE PEPLER CASE

On 4 September 1986 the company summarily dismissed a relief train controller named Pepler.  The reasons given were the unauthorised removal of a confidential document, its distribution among the workforce, an unauthorised absence from the work site, and the misuse of a company vehicle.  (The document was the draft of a letter which was subsequently distributed to all staff, advising them of additional work required under their contract of employment which required their signature or acknowledgement or acceptance.  The additional work was the work of wages employees if required.  In effect, it required staff members to do wages work during a strike.)

The company said that Pepler took the draft letter from the office of the Manager of Rail Operations, photocopied it and at approximately 12 noon left his work station in the administration block without notifying the Chief Train Controller.  Pepler later admitted taking the draft copy, photocopying it, and leaving the work site.

At first instance, Commissioner Coleman found that Pepler had been unfairly dismissed, but he decided not to order his re-employment because it was unlikely that a relationship of trust could be satisfactorily re-established between Pepler and Robe.  He ordered Robe to pay Pepler $48,000 compensation for unfair dismissal. ⁽⁷³⁾  Robe appealed.

It was a long-standing practice of the Commission to deal with claims of unfair dismissal.  Where such a claim was upheld the Commission would either order re-employment of the dismissed worker and compensation for the period between the dismissal and the re-employment, or else order compensation for losses suffered consequent upon the dismissal.

It is likely that the amount of compensation awarded by Commissioner Coleman was a major influence on Robe's decision to appeal to the Full Bench.  In its appeal one of Robe's grounds was that the IR Act did not give Coleman the power to order Robe to pay compensation.  Robe was challenging a long-standing practice of the Commission in unfair dismissal cases.  Consequently, Robe's appeal found little sympathy with the Full Bench who unanimously dismissed it.

It was a different story before the Industrial Appeal Court.  There, the unanimous decision was that the Commission indeed lacked jurisdiction to award compensation to Pepler.  The IR Act gave it no power to do so and the Commission, of course, could only exercise a power which had been given by the Act of Parliament under which it operated.  This did not affect the Commission's jurisdiction to award compensation where it had ordered re-employment, but this was not such a case.  Naturally, many people in trade union circles are upset that the long-standing remedy of compensation for unfair dismissal (where re-employment is not ordered) can no longer be obtained from the Commission.

A worker who is unlawfully dismissed can seek the remedy of damages for wrongful dismissal from a Court but unfair dismissal went further than this, because while it included cases of wrongful dismissal it also included cases of lawful dismissal where the Commission considered that the employer had exercised his right to dismiss unfairly.

In a case of wrongful dismissal before a Court, the measure of damages can be readily ascertained on established legal principles.  However, this was not the case in unfair dismissal proceedings before the Commission.  As the President of the Commission said in delivering the Full Bench's unanimous decision to dismiss Robe's appeal:

The learned Commissioner was trying to fix a fair and adequate sum for the loss of employment, there are no hard and fast rules, one can only apply the very general standard which is that which is just and equitable.  That task, like the matter of deciding whether or not P's dismissal was industrially unfair, involves an exercise of judicial discretion. ⁽⁷⁴⁾

Earlier, the President referred to a decision of Commissioner Fielding in another case ⁽⁷⁵⁾ where it was said:

Put simply, that means the Commission is bound to fix compensation which the ordinary and reasonable man, ignorant of the law, would think just and equitable in the circumstances.  That may well require the Commission to adopt a course different from that which would be produced by a strict application of our precise rules of law with respect to the assessment of damages. ⁽⁷⁶⁾

In upholding Robe's Appeal and determining that the Commission had no jurisdiction to award compensation to Pepler, all three judges of the Industrial Appeal Court were critical of the basis upon which compensation was assessed.  Mr Justice Brinsden contrasted it with the damages Mr Pepler would have received at common law if a Court had found that he had been wrongfully dismissed.  He said:

In addition to a possible slight adjustment of the superannuation entitlement to allow for the four weeks' notice to which Mr Pepler was, upon the Commissioner's finding entitled, the only payment to which Mr Pepler would have been entitled at common law was the sum of approximately $2,360.00, less income tax, representing four weeks' pay in lieu of notice.  The contrast with the sum ordered to be paid by the Commission is striking. ⁽⁷⁷⁾

And later he said:

If it can be accepted ... that the Commission has jurisdiction to order an employer to re-employ a recently dismissed employee, does it follow, as the Respondent contends, that, if it declines to exercise that jurisdiction, it has the jurisdiction to make an order that the employer compensate the employee, and, in particular, that the employer compensate the employee beyond any amount which the employee would reasonably have recovered at common law? ⁽⁷⁸⁾

Mr Justice Olney referred to an earlier decision of his: ⁽⁷⁹⁾

I made the comment at page 744 that the Decision of the Commission in Court Session had not been tested on Appeal and in my opinion it should not be regarded as authority for the proposition that in a case where a dismissal has been found to be unfair an award in the nature of compensation or damages may be made in the absence of an order for re-employment nor should it be regarded as an authority for the proposition that compensation may be assessed with regard to factors other than the salary or wages lost during the period of non-employment. ⁽⁸⁰⁾

Mr Justice Rowland made extensive comments on the Commission's approach to assessing compensation.  He said:

The Commissioner relied upon what was said in the Tak Lau Qwa case to justify the quantum of this award.  At one stage the Full Bench also accepted that the operation of Section 26(l)(a) at least in the context of an Application brought under Section 961 meant that "the Commission is bound to fix compensation which the ordinary and reasonable man ignorant of the law would think just and equitable in the circumstances".  There are three observations I should make about that statement.  First, I have difficulty in understanding where you would find any person who is at once both an ordinary reasonable person and ignorant of the law;  secondly if you find him I suspect that what he would consider to be just and equitable would be rather different from that which the usual ordinary reasonable person, whom I believe would have at least some idea of the law, would think was just and equitable;  and thirdly, I am not quite sure why the Commission should call in aid this person at all.  It is what the Commissioner considers just and equitable that is relevant.

If it be thought necessary to find some justification in fairness for refusing to award compensation, then I can see nothing unfair or unjust as far as the ex-employee is concerned.  He is not left without remedy.  His remedy remains the same as any other employee who is unfairly dismissed, but who is unable to fit his dispute into the category "Industrial".  And even if that be wrong, I cannot envisage why it should be in accordance with equity and good conscience to award such a person something which is called "compensation" which cannot be sustained either at law or in equity.  This dispute was not resolved by ordering re-employment because, as the Commissioner said, "it would be difficult to re-establish the trust fundamental to the working relationship necessary for both parties".  It seems to be not in dispute that the lack of trust was put in train by Mr Pepler, who obtained unauthorised possession of a document for use that was contrary to the interest of that which management believed was in the best interests of the company.  On the Commissioner's findings, this was compounded by management over-reacting by dismissing him.  There is nothing in that to excite the view that an employee should receive an entitlement at common law for damages for a breach of contract. ⁽⁸¹⁾

The Commission, like any other body established by Act of Parliament, has a legal obligation to act in accordance with the powers Parliament gave it and not to exceed those powers.  Some critics (e.g. Graham and Yuill) criticised the use of lawyers by Robe.  Their criticisms will be dealt with later.

Industrial confrontation initiated by the unions occurred during December 1986 and January 1987.  This was the last substantial attempt to re-establish union power in the work place.  It will be dealt with in the next chapter.

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POWER SHOVELS AND THE FINAL CONFRONTATION

Following the decision of the Industrial Appeal Court, ⁽⁸²⁾ the company put out a notice to shovel crews dated 25 November 1986, giving details of how it intended to operate shovels with a one-man crew.  It did not indicate the date on which the proposed system of working would be introduced.  On Monday 8 December, representatives of FEDFU and Robe met to discuss Robe's intention to operate with one-man shovel crews when manning was short.  At 4.20 p.m. that day, the afternoon shift of FEDFU shovel crews held a meeting followed by a strike.  A staff member operated a power shovel on afternoon shift and AWU Haulpak drivers and FEDFU locomotive crews worked with staff.  At the end of the afternoon shift the FEDFU shovel section gave the company notice as follows:

The FEDFU shovel section Pannawonica advises that the company is in contravention of the 1979 Agreement as amended, in relation to manning i.e. shovel operators operating with one man per shovel.

Under such circumstances the company leave, [sic] the FEDFU no option but to withdraw its labour until such time as a decision is forthcoming on the WAIRC or the company agrees to maintain a two man operation.

Just before midnight, the FEDFU rail section gave the company notice that "The FEDFU rail are withdrawing their labour to do with the FEDFU shovels".  Staff members did the work of rail load-out crews during night shift and operated a power shovel.  AWU production workers continued to work.

On Tuesday 9 December, FEDFU rail at Pannawonica gave the following notice to the company:  "FEDFU rail on strike until the shovel situation is resolved to the FEDFU's satisfaction/ FEDFU rail workers employed at Cape Lambert went on strike in the evening and staff drove the main line train.  The FEDFU strike continued and on Tuesday 16 December the whole of the workforce was called out on strike following mass meetings addressed by union officials at Cape Lambert in the morning and at Pannawonica in the afternoon.

Not all workers heeded the strike call.  Some continued to work and were joined by staff members.  Together these two groups continued to load and move ore to the port site.  Seamen's union members employed as deckhands on the tugs used to tow the ore carriers joined the strike.  Robe replaced them with volunteers.  Tug masters and engineers, members of the Merchant Service Guild and the Australian Institute of Marine and Power Engineers respectively, refused to operate the tugs with "non-seamen's union labour".

By the new year the company had issued writs for damages against ten unions and eighteen individuals, including union officials and convenors.  On 5 January 1987, a delegation of Perth union officials went to Melbourne to seek support from the ACTU, which agreed to establish a million-dollar fighting fund to pay for legal expenses and an extensive publicity campaign.

Fear of damages awards prompted ACTU President Simon Crean to arrange a meeting with Peko's Managing Director, Charles Copeman.  On 13 January 1987, they agreed to a set of proposals to present to the striking workers at Cape Lambert and Pannawonica:

• Work would be resumed and all writs withdrawn.
• The company would have regular briefings with the workforce.
• All those returning to work would have their jobs and classifications as at 16 December 1986, with no loss of rights.
• Staff labour and contractors would only be used for essential services and specialist skilled jobs.

The proposals were put to State union officials in Perth on 14 January 1987, and approved.  On 16 January, Crean and some State union officials presented the proposals to meetings of striking workers at Cape Lambert and Pannawonica, who rejected them overwhelmingly.

Following the rejection of the Copeman-Crean proposals, strikers at both work sites set up dispute committees and made a number of requests to be added to the original proposals.  Further negotiations took place between Crean, the unions and the company and the proposals were amended by adding a sentence which read:

After normal operations have resumed, the company will clarify its position in meetings with representatives of the unions on the matters raised by them on 21 January 1987.

After lengthy discussions with convenors of both sides, the proposals were accepted by mass meetings of striking workers at both sites with little opposition.  According to Herb Thompson and Howard Smith the following events caused a shift of the power balance in favour of the company and persuaded the striking workers to return:

Under threat of a Writ of Mandamus by RRIA, the Federal Commissioner of the Conciliation and Arbitration Commission had ordered the three maritime unions back to work.  The Order was effective from 24 January.  Two of the unions, the Merchant Services Guild and the Marine and Power Engineers, were contractors ⁽⁸³⁾ rather than employees of RRIA.  Should they have refused to obey the Order, they would have been subject to action under Section 45D of the Trade Practices Act and RRIA would have proceeded to request an injunction.  The company also hinted strongly that if RRIA employees who were members of Seamen's Union were to fail to return to work, the ships would be moved with "outside labour" and civil action would be taken against the union.  The Federal officers of all three unions ordered their members to return to work.  Only the Seamen's Union members on site refused to return to work until all of the other unions returned.  They argued strongly in the mass meetings, however, that if forced to hold that position "potential disaster for the SUA (i.e. Seamen's Union of Australia) was imminent".  A third move in the struggle was the observation, made by the solicitor brought to the Pilbara by union officials, that any support in the form of industrial action from other unionists in the Pilbara or elsewhere in the State would be met by injunctions and extremely costly litigation, carried by the entire union movement.  This move was related to the fact that a number of convenors from other work sites in the Pilbara had indicated during the week that their membership was prepared to broaden the struggle into a Pilbara dispute if requested to do so.  The solicitor argued successfully that such united action be averted.

Given the presentation of this new information, and also, not unimportantly given the (vague) recognition of the specific grievances of the membership, all of the workers (with convenors' advice) accepted the amended agreement and returned to work on 25 January, five weeks and five days after the strike had begun. ⁽⁸⁴⁾

A significant factor too was the warning by the company that those who had been on strike for more than seven days could be deemed to have abandoned their employment.  This warning by Robe, contained in a letter of 18 September 1986, was the subject of proceedings in the Commission and the Industrial Appeal Court which have been referred to previously and in which the Industrial Appeal Court held that Robe's warning stated the legal position correctly. ⁽⁸⁵⁾

Thompson and Smith (who had the assistance of Neil Flynn, former AMWSU convenor at Robe) recognised that the unions had suffered a major defeat.

If nothing else, the Robe River dispute, along with those others mentioned, ⁽⁸⁶⁾ has highlighted the power of the Trade Practices Act in the hands of management.  We may be witnessing an era which takes us back to the pre-Clarrie O'Shea years, with criminal and civil law penal sanctions significantly reducing the unions' capacity to strike or engage in disputations.

More important from the national point of view is the effect of the result of the dispute on industrial efficiency.

THE CURRENT SITUATION AT ROBE

According to Robe, in the pre-reformation period an average of 5,293 hours were lost in each of the nineteen months from January 1985 to July 1986.  Not a single month was strike-free.  The number of wages employees averaged 1,242, so lost time averaged 4.3 hours per man per month.  Production averaged 1.181 Mt per month, or 951 tonnes per wages employee per month.  (These figures omit the period of conflict over the right to manage, between August 1986 and January 1987.)  Post-reformation, the figures from February 1987 to September 1989 reveal an average of 1,243 hours lost per month for all reasons, not only strikes.  Of the 32 months, no time at all was lost in 23 (72 per cent).  The average number of wages employees over this period was 726, so lost time averaged 1.7 hours per man per month.  Production averaged 1.614 Mt per month, or 2,224 tonnes per wages employee per month.  The chart on the centre pages of this book tells the story in detail.

Robe now claims it has one of the most highly paid workforces in the Pilbara, with average direct gross wage earnings of $36,700 per year, ⁽⁸⁷⁾ and most earning considerably more.  A tug deckhand, for example, can expect $45,000 a year for working a roster of five weeks on, five weeks off. ⁽⁸⁸⁾  In addition there are secondary benefits.  Robe, which has to pay fringe benefits tax on these, assesses them at an average of $18,500 per married employee (assuming two children) per annum.  Robe reckons that wages and secondary benefits give its married wages employees the equivalent of nearly $73,000 per annum before tax, on average.

Perhaps the end result of the dispute is best described in the words of a leading article in The Australian:

When the smoke finally cleared, the company no longer made union membership a condition of employment and workers had signed individual contracts of employment stipulating that refusal to work as directed for five days constituted abandonment of employment.  There was a great deal of pain and suffering, chiefly for the old management team which had been sacked, for the 40 per cent of workers who resigned rather than sign contracts and for the union leadership, which saw its Robe River membership drop by almost 70 per cent.  But productivity was up by more than 100 per cent and the company paid high wages. ⁽⁸⁹⁾

Robe has had numerous critics and it is necessary to examine some of their criticisms and to comment upon them.  This will be the subject of the next chapter.

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ROBE AS VILLAIN

It's the bosses get the money
And the workers get the blame
It's time they stopped treating us
Like prawns in the game

Jeremy Taylor, "Prawns in the Game"

POLITICIANS

The close connection between the unions and the Australian Labor Party is an important source of political influence for the trade union movement. ⁽⁹⁰⁾  Labor politicians, not surprisingly, were generally critical of Robe.  Liberal and National Party politicians on the whole spoke in favour of Robe's action.  It is thought that the opinions of politicians generally did little to advance public understanding of the dispute.  However, two Ministerial statements call for comment.

Since 31 July 1986, Robe has not attended any meetings of the Iron Ore Industry Consultative Council.  The Council consists of representatives of State and Federal Governments and employers and unions in the iron ore industry.  Robe was criticised recently by the Federal Minister for Resources, Senator Peter Cook, and WA Deputy Premier David Parker, for failing to send union representatives from its workforce to a recent meeting of the Council.  As explained above, the Council's purpose was to improve industrial relations and productivity in the iron ore industry.  Obviously, Robe did not consider that the Council was much use to it because of the improvements in production it had achieved without assistance from the Council. ⁽⁹¹⁾  Significantly, before 31 July 1986 union site representatives at Robe were hostile to the Iron Ore Industry Consultative Council and site convenors at Pannawonica boycotted it. ⁽⁹²⁾

In a press release dated 12 August 1986 from the then Minister for Industrial Relations, Peter Dowding, Robe was accused of taking steps to stop supplying power to the Pilbara townships, contrary to an agreement it had with the State Energy Commission.  There was a long-standing policy that power supply to the local townships had priority over power for the mining and shipping operations.  In August 1986, a union representative threatened to cut off Robe's power supply by industrial action.  Robe's response was that if this occurred, it would have the power-house employees sent off site, staff employees would generate as much power as possible, and the company would alter its priorities and put the mining and shipping operation before the townships.  As the unions did not want to face the odium of being responsible for cutting off the electricity to the community, the union threat was not proceeded with.  Robe's response effectively emasculated the power of union representatives of employees in Robe's power stations.  Since August 1986, Robe has been able to continue supplying power to its operation and the Pilbara grid without any disruptions due to industrial action.

UNIONS

An undated leaflet published by the Mining Unions Association and headed "Aftermath of the Robe River Dispute" accuses Robe of humiliating active trade unionists by transferring them to a Special Project Crew (SPC), isolated from colleagues and given the job of cutting up old steel in the sun.  Other active unionists were employed in a Clean Up Group (CUG), known locally as the "Grot Squad", cleaning up and collecting rubbish around townsites.

Robe says that too many workers were employed in the operation and that to remedy this situation it put forward offers of a voluntary redundancy package.  During a conference before Commissioner Coleman, union representatives demanded that Robe withdraw its offer of voluntary redundancy. ⁽⁹³⁾  Robe did so.  Surplus workers were not dismissed but were employed in cleaning up the townsite and industrial site which had been neglected previously, because of work bans, limitations and other industrial actions.  The unions had been warned by Robe's Executive Director, Dr Ernest Miller, that any employee who was persistently disruptive would either be dismissed, or relocated in a job which would not affect production.  For that reason many active trade unionists found themselves in the SPC or the CUG.

Much play was made in the pamphlet of the bad feelings between different sections of the community and Robe was given the blame for these.  Bad feelings were said to exist between staff members and members of the workforce, while within the workforce there was conflict and division between those who worked during a strike and those who did not.  Robe's staff and workforce members live alongside one another in the towns of Wickham and Pannawonica and their children attend school together.  It is a well-known union tradition to seek to punish people who work during strikes and who are termed "scabs".  Much evidence of the extremes to which unions can go appeared regularly in television reports from Britain on action taken by pickets during the British miners' strike and during the conflict between unions and the Murdoch press there.  There were similar incidents at Robe though not on such a large scale, but they can be attributed to action by the strikers themselves.  It is not reasonable for union supporters to criticise their employer for their own actions in stirring up hatred within a community.

Probably the best summary of union complaints is contained in the article by Larry Graham, then Research Officer with the Mining Unions' Association, and endorsed ALP candidate for the Legislative Assembly seat of Pilbara.  He claims that Peko representatives present at award negotiations between the unions and Cliffs in April and May 1986 said they would seek to make no changes to the company's operation.  As explained above, Peko's Industrial Relations Manager, Herb Larratt, told the unions at those meetings that "nothing is forever" and that the company intended to eliminate restrictive practices.  Of course those award negotiations were concurrent with the suspension of Power Station Superintendent Ray Knapp on 28 May 1986 for pressing a power switch at a power sub-station.

Graham complained, "We still don't know exactly what the company meant by 'restrictive work practices' at the time they first raised the complaint."  He claimed, "It took four months to get from the company what it was they considered to be restrictive work practices." ⁽⁹⁴⁾  But he ought to know what a restrictive work practice is.  In proceedings before the Commission, the Commission sought to put Robe in the position of listing the restrictive work practices it wished to see eliminated.  Robe's response was that as it had ended the restrictive work practices, it was up to the unions to put forward a list of work practices they wished to have restored.  The matter was one of tactics.  Graham has no grounds for claiming ignorance of what the company meant by restrictive work practices, when it first raised the complaint.

He suggests the company had ulterior motives of wanting to get people into a position where they had no alternative to private weekly individual contracts with their employer, contracts which excluded both the Commission and the unions. ⁽⁹⁵⁾  Robe never disguised the fact that this was one of its objectives.  Indeed, Robe's stated aim of achieving an award-free operation and excluding both the Commission and the unions was acknowledged (but not accepted) recently in the decision of Commissioner Salmon on the unions' application for a new award governing wages and conditions of employment at Robe. ⁽⁹⁶⁾

Graham is correct in saying that in any job, workers and management will make arrangements which are outside the Award.  His complaint, which is shared by many critics (e.g. the Commission) is that fourteen years of these types of agreement were written off by Robe with no warning whatsoever. ⁽⁹⁷⁾  In fact, the notice ending the agreement purported to give 30 days' notice where that was required.  However, these "agreements" were restrictive work practices conceded by Cliffs to ward off the threat of strikes, work bans and limitations being commenced or continued.  Under the law of contract a person would be entitled to repudiate an agreement for which no consideration or benefit was given by the other party, or which the person had been forced to make under duress or undue influence.

An appeal to readers' emotions comes from the following claim by Graham:

We remember Eva, the tea lady who was 60-odd years old and had been working in the Mess for 10 years when the Mess was abolished, again without any prior warning from the company.  Eva was reclassified as an ore handler and put out on yard duties.  That got wonderful headlines but few of the newspaper readers would have thought of the fact that it is often 45-48 °C out in the yard in summer and when this happened to Eva, she was put out there and was told quite clearly that she was to go out on a shovel.  That was obviously a PR mistake by Robe River but even after it achieved national press coverage Copeman was still able to deny, as he did in a recent article, that it ever happened.

The lady concerned is Eva Dawson who gave evidence before the Commission in Court Session on 14 September 1988.  In that evidence she told the Commission that she was with the yard crew for about four or five weeks and did not actually do any work out there.  She said that she and two other former Mess attendants were told that they were going to get jobs such as cleaning cars, but they were not given that work.  She says that after the period of four or five weeks she was transferred to a job as a house cleaner. ⁽⁹⁸⁾

Graham claims that a major ground for Robe refusing in August 1986 to reinstate the old work practices was that those practices breached safety requirements.  He says:  "That safety requirement was investigated by the State Mining Engineer and it was subsequently found that there were no grounds for the company's safety concerns." ⁽⁹⁹⁾  This mis-states the situation.  As explained above the operation was closed down on 11 August because the company's five registered mine managers took the view that it would be unsafe to continue because much of the workforce was out of control.  The State Mining Engineer's report followed his visit to Cape Lambert on 18 and 19 August, accompanied by senior officials from the Department of Mines and an engineer from the State Energy Commission.  In referring to the State Mining Engineer's evidence to the Commission in Court Session, the then Chief Commissioner Collier said:

Under cross-examination the State Mining Engineer said that his comments related to the position as it existed with the work practices in place prior to the closure of the mine.  He agreed that the ultimate responsibility for the safety of a mine vested in the registered Mine Manager,

[emphasis added] ⁽¹⁰⁰⁾

In other words, the State Mining Engineer's report did not relate to the situation at 10-11 August, but to the effect of the old restrictive practices on safety prior to 31 July.  Robe never claimed that restrictive practices generally affected the safe operation of the mine.

An overall examination of Graham's allegations shows them to be without substance.  Significantly, none of the industrial advocates or industrial relations staff at Robe can remember any involvement by Graham in the dispute or indeed any contact with him during the period covered by his article.

UNIONS MOURN HIROHITO

A bizarre sidelight is provided by a letter faxed by the then Research Officer of the Mining Unions Association of WA to the three Japanese companies with interests in RRIA, namely Mitsui Iron Ore Development Pty Ltd, Sumitomo Metals Ltd and Nippon Steel Ltd.  It deserves quoting in full:

October 4, 1988

Dear Sirs,

We act on behalf of the workforce employed at Robe River Iron Associates in which project your company has a substantial and direct interest.

We are writing to seek a paid day off work for the Robe River workforce on the same day on which Japan observes a day of mourning upon the death of His Majesty Emperor Hirohito of Japan.

The reason for this request is that the workforce at Robe River believe that they have suffered great reductions of their conditions over the last 2 years as a result of the change in management style.  Rightly or wrongly, this has served to foster feelings of ill will towards Japan because of the direct and substantial ownership by Japanese companies such as yours in the Robe River project.

We believe that acceptance of our proposal will reduce those feelings of ill will and will start to rebuild a positive relationship between Australian workers and Japanese interests in the Robe River project and the Japanese people generally.  In addition, we understand the deep sense of grief that will be felt by all Japanese upon the death of his Majesty and observance of a non-work day by Australian workers would be an appropriate way in which they can demonstrate their feeling of sympathy and condolence.

I would like to take this opportunity to extend my own sympathies to you in respect of the current condition of His Majesty.

We should be pleased to receive your response to this proposal at your earliest convenience.

Yours faithfully

Arthur W Clarke
Research Officer

The reply to this letter, if there was one, is not available.

ACADEMIC COMMENTATORS

Mr Bruce Yuill, an Institute Fellow of the Royal Melbourne Institute of Technology and a former head of its Department of Management, criticised Robe in an article in the March 1987 issue of Human Resource Management Australia.  He claimed to have been a consultant to some companies in the iron ore industry and was certainly involved in industrial relations at Hamersley Iron in 1981, but he had no involvement with Cliffs or Robe.

The thrust of Yuill's criticism is that Robe should have tried negotiation, conciliation and working with the Commission -- the standard "Industrial Relations Club" line.  Many of his conclusions of fact are incorrect and he refers to actions by Robe as having been taken by Peko.  He claims that "Peko had not been effective in changing the attitude of its Robe River workforce. ... Peko's highhanded actions only served to push those remaining firmly behind the leadership of the convenors." ⁽¹⁰¹⁾

This is at odds with the facts explained above, and with the view of another academic commentator, Maxine Kaempf (former Senior Tutor in the Department of Industrial Relations at the University of Western Australia and now with the Office of Industrial Relations in Perth), in a paper we shall discuss below.  According to Kaempf:

Industrially the objectives of the company were achieved.  From 1987, there was not only a retraction of work conditions and work practices but, more importantly for management, a weakening of union structures on site.  There are now many non-unionists on the Robe works in the Pilbara. ⁽¹⁰²⁾

Incidentally, Robe would dispute the "retraction of work conditions" (for which Kaempf produces no evidence).  As we have seen, the company claims its employees are the highest paid in the Pilbara.

Yuill refers to the story of Eva the tea lady, which, as shown above, is contradicted by her own evidence to the Commission in Court Session:

It was hardly a public relations feat to put a 60-year-old tea lady on labouring duties!  This was an example of management's new right to determine manning, classification and flexible use of its workforce. ⁽¹⁰³⁾

He alleges in effect that Robe failed in what it set out to do.  That is the base upon which he supports his argument that negotiation, conciliation and arbitration would have achieved a better result.  For example:

Peko first confronted the senior management at Robe;  it had the power to change it.  Peko then confronted its workforce by changing many of its work practices, but Peko tactics generated negative attitudes of its employees who then supported their union.  Peko confronted the union convenors by withdrawing their privileges and demanded that they work;  by the time of the second confrontation it was doubtful if the convenors' power had been curbed.  Peko confronted its own on site staff in demanding that they undertake wages work;  again, Peko did not get their full support.  Moreover, it gained only marginal power by using staff and the benefits of this tactic were lost when ships were prevented from leaving by the maritime unions and Robe's cashflow was endangered.  Peko confronted the State unions but lost its power in the concessions it made to the ACTU.  Peko also confronted the WA Industrial Relations Commission legally and lost that contest as well. ⁽¹⁰⁴⁾

As explained above, the work practices have been changed despite any negative attitudes Yuill may have considered to be held by employees.  Quite clearly, on the evidence shown above, support for unions and their policies has declined dramatically.  The result of the "second confrontation" (December 1986 to January 1987) resulted in the end of convenor power.  Indeed, the whole convenor concept at Robe is now thoroughly discredited in the view of the Commission.  The convenor system of representation at workplace level became an indulgence at Robe River and it carried the seeds of its own destruction. ⁽¹⁰⁵⁾

Yuill cites no evidence in support of his conclusion that Peko did not get the full support of its on-site staff.  Indeed, the staff did carry out wages work during the 1986-87 strike.  He does not mention (as shown in Thompson and Smith's article referred to above) that the maritime unions were forced to withdraw their action by an Order of the (Federal) Arbitration Commission ⁽¹⁰⁶⁾ and threats of action for common law damages.  Robe did not lose its power in the concessions it made to the ACTU.  As shown above these concessions were at best marginal and consisted of agreeing to withdraw common law writs in return for a resumption of work, and to set up a procedure for discussing grievances.  Robe's agreement to restrict the use of staff labour left it free to use it during strikes and in emergency situations.  In effect, this was maintaining a status quo position regarding the use of staff on wages work.  Finally, as explained above, some challenges by Robe to the legal power of the (State) Industrial Commission were successful.  There were others which did not succeed.

In her 1989 discussion paper "Politics and Industrial Relations:  The Robe River Dispute", Maxine Kaempf says:

Within the Marxist paradigm the political nature of industrial society originates from power inequalities which favour the owners of capital.  Employers control capital and labour and workers therefore form unions to wrest that control from owners.  To correct the power imbalance unions use industrial and political methods. ... The attainment and retention of both federal and state governments (in WA) by the Australian Labor Party in the eighties and the cementing of the symbiotic relationship via the prices and incomes accord fulfilled the necessary conditions for legitimate access by labour to political decision making in Western Australia.  Levels of industrial disputation declined dramatically ... where the working class has attained a level of political mobilisation which results in political office for the party of labour, and if the industrial organisation of labour is such that internal discipline can be exercised, then conditions are appropriate for the exercise of industrial power to be subordinated to the political goal of maintaining office.  Thus the levels of strikes will be lower than when either a non-labour party is in power or if internal union organisation is weak. ...

[Industrial conflict in Australia in the 1980s no longer played a major role in relationships between the parties, as both capital and labour focused on economic ground.  A policy of restraint in the use of the strike weapon was a trade off from labour to capital in the interests of economic performance and the privilege of political responsibility. ... As capital's control of political power weakened then a heightened sense of the industrial alternative became an important strategy in the conflict.  In this dispute, management invoked industrial strategies in an attempt to tilt the power balance back towards the owners of capital.  Contrary to the conventions of industrial relations, the employer used industrial means to achieve political ends. ⁽¹⁰⁷⁾

These extracts illustrate the framework within which Kaempf sets the dispute at Robe River, and which controls her conclusions, The framework is a theoretical one based upon an unsustainable "class-struggle", "labour-versus-capital" view of Australian politics and society.  It is undeniable that union officials have access to political decision-making in Western Australia, but to say that because they have this access therefore "labour" has access to political decision-making is to commit an elementary logical error technically termed the fallacy of division. ⁽¹⁰⁸⁾

To take the matter further, one may contrast the views of the ACTU and Labor State Governments that there should be no sanctions against unions, with public opinion as revealed in a poll commissioned by the Hancock Committee of Review into Australian Industrial Relations Law and Systems.  Ninety per cent of those polled favoured some form of penalty against unions that did not keep to the laws and rules of the industrial relations system. ⁽¹⁰⁹⁾  Kaempf's suggestion that capital's control of political power had weakened does not fit well with the view of many commentators that the influence of some sections of capital has increased during the period of Labor government in the 1980s. ⁽¹¹⁰⁾  The Accord itself may also be seen as serving the interests of some representatives of capital, including major employer organisations such as the Confederation of Australian Industry and the Metal Trades Industry Association.  The Accord itself has created a fall in real wages over the past six years which is in marked contrast to experience in the past. ⁽¹¹¹⁾  It is a myth to claim that the Accord has resulted in more responsible action by unions, reducing the number of strikes.  In fact, as Gerard Henderson has shown, over four years to 1986 there was a world wide decline in industrial disputation in the Western democracies. ⁽¹¹²⁾  Between 1981 and 1985, time lost due to industrial disputes fell in other major industrial countries:

United States	60 per cent
France	50 per cent
Italy	80 per cent
Canada	60 per cent
West Germany	80 per cent

Industrial disputes were declining in Australia before the Hawke Government came to power:

Industrial Disputes

Year	Days Lost Total	Days Lost per 100,000 employees
1981	4,192	798
1982	2,158	392
1983	1,641	249
1984	1,307	246
1985	1,255	230

Source:  Henderson p 292.

From this collapsed framework Kaempf paints a picture of responsible action by unions in the face of employer militancy:

Union officials therefore spent much time convincing convenors and members that they should not be provoked to strike action but should abide by the WAIRC orders not to act. ... [T]he effectiveness of officials in constraining labour withdrawal became apparent as the confrontation proceeded. ⁽¹¹³⁾

This contrasts with the fact that, as we have seen, State union officials called the strike on 16 December 1986 through meetings at Cape Lambert and Pannawonica.  This was of course the strike that was initially called to force Robe to retain two operators per power shovel when only one was required, and that lasted until 24 January 1987. ⁽¹¹⁴⁾  Kaempf also repeats the discredited story of Eva the tea lady working on a labour gang. ⁽¹¹⁵⁾

Kaempf echoes the union line when she writes:

Minister Parker appointed mine inspectors to investigate the safety problems at the Robe site.  Miller [Robe's Executive Director] protested strongly at the appointment of these "state police" and referred to the impropriety and doubtful legality of these appointments. ⁽¹¹⁶⁾

Mines inspectors are public servants who have the duty of ensuring that registered mine managers carry out their safety obligations under the Mines Regulation Act.  An inspector can order work to cease.  Two mines inspectors appointed by Minister Parker to "investigate safety problems at Robe" were Mick Baird and Neil Flynn, respectively former AWU and AMWSU convenors at Robe.  After protests by the company these two "inspectors" were withdrawn.

These illustrations from Kaempf s report of the dispute fit with the framework she attempted to establish.  Not surprisingly her conclusions are designed to support a view that Robe was attempting to achieve political power by its actions.  She overlooked the simpler conclusion that Robe was merely trying to achieve industrial efficiency.  In this it succeeded, but Kaempf concludes:  "The unorthodox industrial methods that Peko-Wallsend used to achieve political ends were instrumental in the exclusion of radical business from political decision making for at least one period of parliamentary office." ⁽¹¹⁷⁾

If by "radical business" Kaempf means employers who seek remedies outside the industrial relations system, then no doubt she did not expect the Hawke Government to act as it did during the 1989 airlines disputes.  But at the time she wrote, the Hawke Government would not have listened to an employer who wished to challenge the values enshrined in Australia's 85-year-old system of compulsory arbitration.

THE INDUSTRIAL RELATIONS CLUB

Since the publication of Gerard Henderson's essay "The Industrial Relations Club", ⁽¹¹⁸⁾ the "Club" has come under increasing criticism.  IR Club philosophy is that compulsory arbitration is a good system, and disputes between employers and unions should be resolved by negotiation, conciliation and arbitration.  Club supporters act as though union power were sacrosanct, and any successful challenge to that power must surely undermine their sense of security.  Management and "consultants" who have advised employers to operate within Club constraints must surely feel that Robe's action threatens their sense of security.  After all, if management can be sacked for conciliating and negotiating a series of "deals", "arrangements" and work practices such as those that existed at Robe, the adoption of similar policies by other companies in Australia could create much unemployment among managers, industrial relations officers and consultants.  Public servants employed in State and Federal departments of industrial relations have as one of their main functions the enforcement of industrial awards (against employers only).  They and departmental research staff, who provide the ideological superstructure for departmental operations, have a vested interest in the present system continuing to operate in accordance with Club values.  To the unions, Robe's action was a blow to the myth of invincibility which had grown up since the O'Shea case. ⁽¹¹⁹⁾  It is hardly surprising that Graham (unions), Yuill (management consultant) and Kaempf (WA Department of Industrial Relations employee) took the views they did.

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SOME CONCLUSIONS FROM THE DISPUTE

THE COMMISSION

In the exercise of its jurisdiction under this Act the Commission shall act according to equity, good conscience, and the substantial merits of the case without regard to technicalities or legal forms. ⁽¹²⁰⁾

Equity is a roguish thing.  For law we have to measure, know what to trust too;  equity is according to the conscience of him that is chancellor, and as that is larger or narrower, so is equity.  Tis all one as if they should make the standard for the measure we call a "foot" a chancellor's foot;  what an uncertain measure would this be!  One chancellor has a long foot, another a short foot, a third an indifferent foot.  'Tis the same thing in the chancellor's conscience. ⁽¹²¹⁾

Many essential features of the WA Industrial Commission are identical to those of the Federal Industrial Relations Commission, well described by Bill Cole in a recent paper for the Australian Institute for Public Policy.  It is worth quoting his comments at length:

The founding father of the IR Club, Mr Justice Higgins, saw in his creation "a new province for law and order".  The arcane body of knowledge that Club members prize themselves on possessing is much more akin to "lore" than "law".  In fact, law has precious little to do with the operations of the Club. ⁽¹²²⁾

This could be demonstrated in tedious detail, but the Club itself has conceded the point.  Its last substantial philosophical effort -- the Hancock Report in 1985 -- showed where members saw law standing in the system.  The report rejected the idea of penalties on unions or unionists for failing to comply with IR Commission Orders, effectively on the grounds that the unions were too powerful to be forced to comply.

Some have said that this was placing unions above the law.  More precisely, it was placing power above the law.  Although there are a few contrary examples overseas one could look at -- for instance, Colombia and the cocaine barons -- it is a characteristic of civilised nations that the law, not power, is supreme.

The IR Commission works like this:

• Its decisions are binding on employers;  indeed there is an Arbitration Inspectorate which checks on whether employers are observing Award conditions and can initiate prosecution action if they are not.
• So binding are decisions seen to be on employers that if an employer challenges the jurisdiction of an IR tribunal, as happened for example in the Robe River dispute, that challenge itself is seen by the Club as outrageous.
• Where the IR Commission's jurisdiction is unchallengeable its writ binds the employer side in all disputes before it (unless, of course, the employer ceases to employ the relevant classes of labour -- or goes out of business).
• The union side, however, rejects IR Commission decisions frequently and -- despite much huffing and puffing on the part of the Commission -- usually with impunity.  For example, unions have rejected IR Commission recommendations or decisions, have taken industrial action, have had the case heard while that action is occurring, and have come out winning.
• Basically the IR Commission seeks compromise between competing power centres, but in doing so it pays regard to the likely results of adverse reaction by those power centres.
• If the employer side does not like a decision, it may complain but will comply.  The union side, on the other hand, may defy the Commission and cause prolonged trouble.  Compromise can therefore easily tend to be skewed towards the union side.
• In effect, the unions can often play on the basis of "heads I win, tails we toss again".
• So dispute-settling tends to come down to appeasing the party promising to be the more difficult;  "tends" because obviously the merits of the case cannot be ignored altogether and the IR Commission operates with a keen eye to its own survival.

For all these reasons and despite the fuss over the Staples case the IR Commission is not a quasi-judicial body.  Moreover, all parties cannot feel equal before it -- and do not. ⁽¹²³⁾

Commissioner Coleman's Order of 5 August 1986, directing Robe to restore the status quo as at 31 July 1986, was obviously based on his past experience of the power of union site representatives at Robe.  His second "status quo ante" Order was obviously based on a similar perception.  But a system of dispute-settling by compulsory conciliation and arbitration must tend to come down to appeasing the party promising to be the more difficult.

It is probable that another Commissioner dealing with the matters Coleman faced in early August 1986 would have ruled in much the same terms as Coleman's "status quo" orders of 5 and 11 August.  Coleman's error of law was a technical one:  he had no power to make such orders under Section 44 of the IR Act, which was the Section under which the compulsory conferences were called at which he made the orders.  If the matter had proceeded by an application for arbitration under Section 32 of the Act, he would have been entitled to call a compulsory conference to endeavour to resolve the matter by conciliation and, to assist the matters in dispute to be resolved thereby, to make the "status quo ante" orders.  Given the fact that Commissioners have to act promptly in situations where the facts of a dispute are often complex and urgent resolution is needed, a Commissioner may err in law from time to time.  It is surprising that such errors do not occur more often.

The Commissioners have their statutory obligations under the IR Act to comply with, and their obligations to settle disputes which come before them for conciliation and arbitration.  Often the two may come into conflict (e.g. the "status quo" Orders).

The Commission is not bound by its previous decisions, but tends to follow them so as to show consistency in its approach to industrial matters.  This tendency to uniformity is reinforced by some provisions of the IR Act.  For example, Section 50 gives the Commission power to make general orders covering all employees in the State or those employed under Awards or Industrial Agreements.  Sub-section 50 (10) prohibits the Commission from making a general order until it has afforded the principal union body (the Trades and Labor Council of WA) and the two principal employer bodies (the Confederation of Western Australian Industry and the Australian Mines and Metals Association) an opportunity to be heard in relation to the subject matter of a proposed general order.  Under Section 51 the Commission is obliged to consider passing on increases handed down by the Federal Commission in a national wage case.

Under Section 37, an award of the Commission binds all employers in the State in respect of all employees employed by them in the callings mentioned in the award in the industry to which the award applies, unless its terms provide otherwise -- the "common rule".  A consequence of this is that most employers are represented by either the Confederation or the Australian Mines and Metals Association in proceedings before the Commission.  It is only large employers such as those in the iron ore industry who can expect to have separate Awards made in respect of their workforces.  Even so, the Commission would not allow an employer in the iron ore industry to achieve wages and conditions for its workforce substantially different from those prevailing in the industry generally.

This was illustrated on 6 September 1989, when Commissioner Salmon delivered his Reasons for Decision in the case in which unions were seeking a new award to cover the Robe workforce.  Robe had argued for an award-free operation.  Commissioner Salmon rejected that approach.  He said:

An award-free operation for one out of four iron ore mining companies in the Pilbara is a radical proposition, to say the very least.  The subject of labour market deregulation is widely discussed today as everybody associated with industrial relations will readily agree, but at the same time in the Federal and Western Australian jurisdictions centralised wage determination and industry regulation by award or, what is essentially the same thing, by registered industrial agreement, is part of the prevailing industrial policy. ... [G]iven the apparent wide concern with labour markets in a microeconomic context ... it is reasonable to expect that the Confederation of Western Australian Industry and the Mines and Metals Association, at least, would have initiated cases to achieve a maximum degree of labour market deregulation if indeed they were in support of that proposition.  That they have not done so seems to me to underline the degree to which centralised wage determination, comparative justice and regulation by award are entrenched in the Western Australian industrial relations system. ⁽¹²⁴⁾

Of course, some employers in Western Australia are respondents to Federal awards.  In that case, broadly speaking, the Federal award is binding and any State award dealing with the same matter is likely to be invalid. ⁽¹²⁵⁾  Uniformity is part of the Federal system too.  Section 94 of the Industrial Relations Act 1988 provides:

In determining an industrial dispute, the Commission shall, subject to Section 95, provide, so far as possible and so far as the Commission considers proper, for uniformity throughout an industry carried on by employers in relation to hours of work, holidays and general conditions in the industry.

The result of these provisions in the State and Federal systems is that one award hearing covers several employers in an industry.  This means that most employers have little say in the wages and conditions that apply to their employees.  Similarly, with only minor exceptions the system only allows employees to be represented by unions. ⁽¹²⁶⁾  This means that workers have no direct say in their own conditions of employment and are certainly not in a position to negotiate those conditions directly with management.

Some enterprise agreements are possible in the Federal jurisdiction. ⁽¹²⁷⁾  On 15 December 1989, the Full Bench of the (Federal) Commission ratified an Industrial Agreement between Southern Aluminium Limited and the Federated Ironworkers Association (FIA).  Under this agreement the FIA has the exclusive right to represent all people employed as production team members at the company's plant in Bell Bay, Tasmania.  Other unions to which the production workers would otherwise have been eligible to belong, including the AMWSU and the ETU, have been ruled out of representing production team workers there.  This agreement was argued before the Federal IR Commission for eighteen months. ⁽¹²⁸⁾  The decision points the way to enterprise agreements, but seems to be restricted in principle to "green fields" or start-up industries.  Few, if any, small employers would be able to benefit from it unless they could afford to employ a specialist industrial advocate to conduct their case.  There is no similar provision in the Western Australian IR Act, which maintains a rigid demarcation between the classes of employees that may be enrolled by each union, ⁽¹²⁹⁾ and thus maintains the continuance of numerous unions divided along craft lines representing employees of the same employer.

The Robe dispute shows that the system of compulsory arbitration militates against industrial efficiency.  The pre-reformation restrictive practices all grew up while that system was in operation.  Some of them first came into being in part as a result of orders of the Commission (e.g. the overtime roster system and the requirements for union approval before engaging a contractor). ⁽¹³⁰⁾  It is also reasonably clear that the status quo orders of 5 and 11 August 1986 created the industrial chaos that led to the closure of Robe's operation on 11 August.  No impartial observer of the Australian industrial relations scene could deny that rorts, restrictive practices and industrial inefficiency are widespread in Australian industry, and not seriously redressed through the arbitration system.  A classic example of this is the gross inefficiency of the Australian waterfront. ⁽¹³¹⁾

To give industry a chance, the industrial relations system must be changed.  To quote Cole again:

The key to success is to establish the link between productivity and employee well-being, a link so sadly not evidenced in the Club system.  At present unions concentrate on getting higher nominal wages for their members by going to the IR Commission or participating in the Accord rituals.  But it is higher real wages which make their members better off and the IR Commission is neither structured nor motivated to see beyond the "money illusion" to the productivity/real wago connection.

Yet understanding that connection is critical.  There is genuine "magic pudding" to be had.  Employers and employees, by mutual agreement, could both benefit by sharing the fruits of productivity gains made possible by removing archaic work practices, demarcation nonsenses and the range of limitations that plagues the industrial system. ⁽¹³²⁾

To achieve this in Western Australia one could adopt legislative changes similar to those recommended by Cole in respect of the Federal system.  This would require legislative changes aimed at the following outcomes:

• The IR Commission legislation to be amended to permit employers and employees to agree to opt out of the Commission's jurisdiction on a job, enterprise, company or industry basis;
• the only condition required before opting out would be a legally enforceable employment contract, the terms of which would not be the concern of the Commission;
• opting out would remove those concerned from all awards and oversight by the Commission and neither party could go back to the Commission on any pretext during the term of the contract;
• opting out could be on the basis of belonging to a particular enterprise-based union or union covering all of the employees, or on the basis that employees were free to not be union members at all;
• the contracts would have the force in law, in the ordinary courts, of any other kind of contract, including in relation to damages for breach of contract where enterprise contracts are in place; ...
• the legislation would leave it open for contracts to provide for private arbitrators on matters in dispute within the contract, not being matters meriting legal determination, with the decision of the arbitrator being binding and with the parties paying for the arbitration. ... ⁽¹³³⁾

This would need to be accompanied by a provision similar to Section 118 of the Commonwealth Industrial Relations Act 1988, empowering the Commission to award coverage of employees at a particular enterprise to one union to the exclusion of others.  In order to protect the workers, the union which proposed to obtain exclusive coverage would require to obtain the approval of a substantial majority of those workers voting in a secret ballot.  Workers should be able to form their own enterprise unions.  To facilitate achievement of this it would be necessary to change the law to allow the resignation of a union member to take effect when he likes.  Present laws allow a union to require a minimum period of three months' notice before a member's resignation takes effect. ⁽¹³⁴⁾

THE UNIONS

One of the problems highlighted by the Robe dispute was the fad that convenors and site delegates often acted contrary to the wishes of their union.  This problem could be tackled by a law making a union vicariously liable for the consequences of industrial action taken by any of its members.  To guard against irresponsibility, a union should have the right of recourse against members who have caused it to incur liability by taking industrial action.  This would give union executives an incentive to ensure that their members abided by awards and by Industrial Agreements made by the union.  Of course, under the proposals shown above, union members at a work place would be free to resign from their union, join another union or form a new union.

There is no reason why union officials should not have responsibilities and liabilities analogous to those imposed upon company directors.

Deregistration as a sanction against unions should be removed from the law.  Once a union no longer has a monopoly of the right to enrol people in a particular occupation, deregistration becomes unnecessary.  In its place there should be the remedy of liquidation for reasons analogous to those applied to companies under the Companies Codes.

Statutory penalties too should be removed from the system.  It should be left to employers and their workforce to agree about penalties, if any, being incorporated in their Awards or Agreements.

CONCLUSION

The Robe dispute highlighted the problems that arise from an industrial relations system based on fear of union power.  Robe has shown that it can be challenged successfully and that improvements in production and productivity can be achieved by defeating irresponsible union power.  But industrial relations ought not to be about union power or having to combat it.  It should be about workers and management working together, with long-term commitment seen as essential.  This cannot be achieved with local leaders like the class warriors of Wickham and Pannawonica.  Nor can it be achieved through a compulsory arbitration system which wants to restore to the unions their "status quo".  Management is not perfect either.  The whole centralised arbitration system has prevented management and workers from dealing with each other directly and has required them to conduct their industrial relations through outsiders in union, employer organisation and Commission bureaucracies.

Surely the answer lies in giving people the power to choose how they conduct their industrial relations and who will do their negotiating for them.  Such a new system would give the workers the opportunity to negotiate for better wages and conditions than are standard in their industry in return for an agreed period without strikes.

---

ENDNOTES

1.  109 and 154 tonnes respectively.

2.  See generally 67 WAIG 15.

3.  Copeman p 1.

4.  Much of the information in this paragraph comes from Dufty and Mulvey p 26.

5.  See Dufty and Mulvey pp 3-4.

6.  See Dufty and Mulvey p 15.

7.  See S.37 and S.114 of the WA Industrial Relations Act 1979, hereinafter referred to as the IR Act.

8.  See IR Act S.41.

9.  See generally 67 WAIG 3.

10.  67 WAIG 3 and 4.

11.  67 WAIG 37.

12.  per Gregor C 67 WAIG 80.

13.  26 WAIG 67.

14.  67 WAIG 31.

15.  Refer Commissioner Gregor's Reasons for Decision in Case No CR 612D of l986 at p 5.

16.  58 WAIG pp 1383-4.

17.  See e.g. Copeman p 2.

18.  See e.g. Clarkson C in the Shell Refining case, 127 CAR 128.

19.  58 WAIG p 1384.

20.  58 WAIG pp 183-4.

21.  Referred to 67 WAIG 5.

22.  Copeman p 1.

23.  67 WAIG 21.

24.  Daily Commercial News, 5 June 1986.

25.  67 WAIG p 37.

26.  Exhibit 16 in Case No 758 of 1986;  refer to pp 549 and 550 Transcript of Evidence 10/9/86.

27.  AMFSU was the name of the Federal union to which members of the AMWSU belonged.  Motion 1 is referred to at pp 540-541 of Transcript in Case 758 of 1986 dated 10/9/86.

28.  Transcript in Case 758 of 1986 p 544 dated 10/9/86.

29.  Ibid, p 545.

30.  Ibid, p 546.

31.  Ibid.

32.  See 67 WAIG 37.

33.  Transcript in Case 758 of 1986 p 1750.

34.  Evidence of B.D. Oliver in Case 758 of 1986 Transcript pp 612 and 613 dated 10/9/86.

35.  Ibid, p 615.

36.  Evidence of P.A. Williams Transcript in Case 758 of 1986 p 642 dated 11/9/86.

37.  See ibid, p 643.

38.  Ibid, pp 643-644.

39.  Refer Reasons for Decision of Gregor C in Case CR 612D of 1986 delivered on 12/2/87.

40.  Case CR 612D of 1986 Transcript pp 69-70 dated 8/12/86.

41.  Transcript in case No CR 612D of 1986 Evidence of J.W. Castle at p 102 dated 8/12/86.

42.  Matter CR 43 of 1978.

43.  Referred to by Gregor C at 67 WAIG 31 and 32 under heading "22 CR43 of 1978 -- Overtime Rosters".

44.  67 WAIG 37.

45.  Full text of the notice and letter are at 67 WAIG 37.

46.  For extracts from these letters see 67 WAIG 38.

47.  66 WAIG 1408.

48.  For full text of Order see 66 WAIG 1409.

49.  67 WAIG 9.

50.  Refer generally Transcript of Evidence in Case 758 of 1986 pp 1565-1571.

51.  67 WAIG 41.

52.  Reported at 66 WAIG 1405.

53.  66 WAIG 1567.

54.  67 WAIG 38 and 39.

55.  67 WAIG 1294.

56.  67 WAIG 39.

57.  66 WAIG 1553.

58.  Case No. 758 of 1986.

59.  67 WAIG 35.

60.  67 WAIG 37.

61.  67 WAIG 19.

62.  Refer to 67 WAIG 52.

63.  67 WAIG 2 & 52.

64.  See 67 WAIG 10 and 11.

65.  67 WAIG 23.

66.  67 WAIG 22.

67.  67 WAIG 41.

68.  Order in Matter C676 of 1986, made 7/10/86.

69.  67 WAIG 315.

70.  67 WAIG 58.

71.  67 WAIG 745.

72.  67 WAIG 1097.

73.  Reasons for Decision of Coleman C dated 27/11/86 referred to in Reasons for Decision of Full Bench on Appeal 67 WAIG 1104 and 1105).

74.  67 WAIG 1112.

75.  Tak Lau Qwa v Smart & Another, 64 WAIG 858.

76.  67 WAIG 1106.

77.  68 WAIG 12.

78.  68 WAIG 17.

79.  ADSTE v Robe River Iron Associates, (1987) 67 WAIG 40.

80.  68 WAIG 18.

81.  68 WAIG 23.

82.  67 WAIG 315 delivered 13/11/86.

83.  [In fact they were RRIA employees and Robe had not sought a writ of mandamus]

84.  Thompson & Smith, "The Conflict at Robe River" 86, 87.

85.  67 WAIG 1097.

86.  "Mudginberri from which meat worker unionists are still recovering the fines and court costs;  the SEQEB dispute in Queensland, which ended in a damaging loss to the Electrical Trades Union and the Dollar Sweets dispute in Victoria, in which the Federated Confectioners Association was defeated";  referred to in these words by Thompson & Smith at p 90.

87.  This excludes apprentices, who of course earn less, and the marine group of employees, who earn much more.

88.  Weekend Australian, 4-5 November 1989.

89.  The Australian, 15 December 1989.

90.  Dufty and Mulvey p 15.

91.  West Australian 15 December 1989.

92.  See above and refer Kaempf p 6.

93.  Matter C536 of 1986.

94.  Graham p 71.

95.  Graham p 70.

96.  Transcript of Reasons for Decision of Salmon C in Case A4(1) of 1987 delivered 6 September 1989 pp 6-9.

97.  Graham p 70.

98.  See Transcript of Evidence in Case No A4 of 1987 pp 1216 and 1217 -- Evidence of E.M. Dawson.

99.  Graham p 71.

100.  67 WAIG 9.

101.  Yuill p 21.

102.  Kaempf p 19.

103.  Yuill p 20.

104.  Yuill 24 and 25.

105.  Reasons for Decision by Salmon C delivered 6/9/89 in Application No. A4(1) of 1987 being an Application by Unions for a new Award covering the Robe workforce;  Transcript p 21.

106.  Now the Industrial Relations Commission.

107.  Kaempf pp 2-3.

108.  See e.g. S.H. Mellone, Elements of Modem Logic, p 29.

109.  Hancock Report, Volume 2 pp 628-29.

110.  See e.g. "WA Inc:  Portrait of a Corporate State", The Age 21 December 1987;  O'Brien (ed.) The Burke Ambush:;  O'Brien, "WA's Executive State 1983-1989".

111.  See Extract from Budget Paper No. 2 quoted in Cole, "Making Full Employment Legal".

112.  G. Henderson, "The Fridge Dwellers -- Dreamtime in Industrial Relations" in Arbitration in Contempt.

113.  Kaempf p 7.

114.  Kaempf p 14.

115.  Kaempf p 10.

116.  Kaempf p 12.

117.  Kaempf p 21.

118.  Quadrant, September 1983.

119.  Sir John Kerr, "Recalling the Northern Territory Cattle Station Industry Award Case of 1965 and the O'Shea Case of 1969" in Arbitration in Contempt.  For a discussion of the effect of the O'Shea case on penal sanctions in industrial awards, see Sykes & Glasbeek, Labour Law in Australia, pp 547-542.

120.  WA Industrial Relations Act 1979, S.26.

121.  John Selden, 1584-1654.

122.  [As witness Robe's record of failure before the Commission and success in the Industrial Appeals Court.]

123.  Cole, p 3.

124.  Case A4(1) of 1987 Transcript of Reasons for Decision of Salmon C pp 9 and 10.

125.  (Commonwealth) Industrial Relations Act 1988, S. 152.

126.  Industrial Relations Act Ss 29, 31.

127.  (Commonwealth) Industrial Relations Act S. 118.

128.  Weekend Australian, 16-17 December 1989.

129.  S. 55;  S. 189 of the Commonwealth Act has a similar effect.

130.  See 67 WAIG 31, 25, 26 & 45.

131.  See e.g. "Dying on the Docks", Time Australia, 18 December 1989, p 44-49.

132.  Cole p 9.

133.  Cole pp 7-$.

134.  See Industrial Relations Act 1988 (Commonwealth) S. 264.

---

BIBLIOGRAPHY

Cole, W., "Labour Market Reform:  Making Full Employment Legal", Economic Witness, 27 November 1989.

Copeman, A.C., "The Robe River Affair", address to the H.R. Nicholls Society, 7 June 1987.

Duffy, N.F. & Mulvey, C, The Sources of Union Power, Perth:  Australian Institute for Public Policy, 1987.

Graham, L., Trailer of the 1987 Robe River Dispute (Papers in Labor History No 2) Perth:  Australian Society for the Study of Labor History, October 1988.

H.R. Nicholls Society, Arbitration in Contempt, Melbourne:  H.R. Nicholls Society, 1986.

Hancock Report (Australian Industrial Relations Law and Systems:  Report of Committee of Review), Canberra:  AGPS, 1985.

Kaempf, M., "Politics and Industrial Relations:  The Robe River Dispute" (Discussion Paper in Industrial Relations No. 15), Perth:  University of Western Australia Department of Industrial Relations, 1989.

Mellone, S.H., Elements of Modern Logic, University Tutorial Press, 2d Edn 1958.

O'Brien, P. (ed.) The Burke Ambush:  Corporatism and Society in WA, Perth:  Apollo Press, 1986.

O'Brien, P., "WA's Executive State 1983-1989", Economic Witness, 29 September 1989.

Sykes, E.I. & H.J. Glasbeek, Labour Law in Australia, Sydney:  Butterworths, 1972.

Thompson, H., & H. Smith, "The Conflict at Robe River", Arena 79 (1987), p 76.

Trades and Labor Council of Western Australia, Aftermath of the Robe River Dispute, Perth:  Trades and Labor Council, n.d.

Yuill, B., "Robe River -- A Failure in IR and HR", Human Resource Management Australia, March 1987, p 17.