WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION. Industrial Relations Act 1979. Robe River Iron Associates (Appellant) and Amalgamated Metal Workers and Shipwrights Union of Western Australia and Others (Respondents). No. 436 of 1991. BEFORE THE FULL BENCH HIS HONOUR THE PRESIDENT P.J. SHARKEY. CHIEF COMMISSIONER W.S. COLEMAN. COMMISSIONER J.F. GREGOR. 23 August 1993. Reasons for Decision. THE PRESIDENT: This is the unanimous decision of the Full Bench. By order dated 15 January 1993, the Industrial Appeal Court made, formal parts omitted, the following order:— "The Court doth order that the appeal on the third ground be allowed and remit the matter to the Full Bench to consider and apply the correct principle and test on the question whether the Commissioner could not possibly have come to any other conclusion." We heard submissions, therefore, on 30 March 1993 as to what order, if any, we should make in the discharge of our duty. Mr Dixon (of Counsel), who appeared for the appellant, submitted that the issue for determination by the Full Bench on this occasion is whether the Commission at first instance, in the proper application of the Wage Fixing Principles, could not possibly have come to a different result in exercising its discretion in the arbitration of the matters before it. 73 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 2647 It was his submission that the appeUant needs to show that the denial of natural justice deprived him of the possibility of a successful outcome, and once that happens, and in order to negate that possibility, the respondents needed to satisfy us that a properly conducted trial could not possibly have produced a different result. It was therefore submitted that the test set out in Stead v. State Government Insurance Commission (1986) 161 CLR 141 could only be satisfied if the Wage Fixing Principles bound the Commission to impose the conditions previously contained in Industrial Agreement No 10 of 1979. It was submitted, put shortly, that the Wage Fixing Principles could not and did not bind the Commission to impose by award all the terms and conditions in existence under Industrial Agreement No 10 of 1979, and it was only if the Commission reached that conclusion could it then say that to remit the matter would be a futility. The submissions were, summarised, as follows:— (1) That the Wage Fixing Principles have never prescribed that in the making of a first award the Commission is bound to impose all the conditions of employment existing at the time of the application without variation. In fact, so the submission went, the very terms of the First Award Principle are to the effect that prima facie the existing conditions are the main consideration and no more. Hence, other considerations are relevant, and that in itself recognises the discre- tion which is imposed in the Commission in determining what award it should make, if any. (2) Further, any submission that no change could possibly be made is inconsistent with the statutory obligations of the Commission to hear and determine the matters in the exercise of the Commission's discretion. In short, because it was not excluded, a different conclusion could have ten arrived at. (3) Further, to suggest that the Principles bound the Commission to reinstate the Agreement, No 10 of 1979, would be to defeat the statutory rights embodied in s.41(7) of the Industrial Relations Act 1979 (as amended). (4) Further, it was submitted that any question of comparative wage justice was negated by the introduction of the Restructuring and Efficiency Principle 1987 (67 WAIG 435 at 436-439) of that decision by the Australian Commission. (5) Further, the First Award Principle contains in it inherently a discretion. This decision was also subject to the Second Tier Principle and the Wage Adjustments Principle which remained in exis- tence in the 1988 State Wage Case. Mr LeMiere (of Counsel) made a number of submissions, which can be summarised as follows:— (1) The basis of the case was that if the Commission had not had regard to the motives of the appellant in withdrawing from the Industrial Agreement, it could not have come to any different conclusion, or given Robe an opportunity to be heard. (2) That is because the proper application of the Wage Fixing Principles to the facts and circumstances could not have allowed any of Robe's proposals. (3) Further, if the arbitration had been properly conducted a different decision could not have ten reached. (4) The Commission was bound to apply the Wage Fixing Principles (see CWAI v. FMWU 69 WAIG 3219). (5) Because the 1989 State Wage Case Decision had been handed down by the time the Commission in this matter completed its hearing, those Principles which applied were as follows:— (a) The First Award Principle. (b) The Structural Efficiency Principle. (c) A prohibition on negative cost-cutting exer- cises. (6) Hence, any attempt to reduce the conditions of employees must be done in accordance with the Principles (see 68 WAIG 2412 at 2413 and 2416). (7) Indeed, the Commission was required not to act or make decisions in disregard of the Principles or their objectives. (8) There was a firm requirement for co-operation and consultation in this exercise (see 69 WAIG 2927). (9) The Work Value Principle has no application to this claim or proposals made by Robe River. (10) The Commission emphasised the co-operation between employers and employees as the "hall- mark of structural efficiency exercises" (69 WAIG 2921). (11) In this case there was no award covering the previous conditions of the employees and the application was properly treated as an application for a first award. Thus, under the First Award Principle, the main consideration was the existing rates and conditions. In the absence of any factor which displaced the First Award Principle, the Commission was bound to make an award which reflected the existing rates and conditions ((ie) the terms of the Industrial Agreement). (12) The Robe River proposal represented a radical restructuring of the existing terms and conditions of employment. (13) The reference to Robe's financial position was a matter considered by the Commission in terms of the Economic Incapacity Principle, and any claim that that was not done was not made out. (14) There was reference to the Robe rate which was a trade-off position (see 71 WAIG 582 at 600, 615 and 616). (15) The Robe proposal was contrary to the Wage Fixing Principles. They did not come within the First Award Principle and they were trade-offs. They were also negative cost-cutting measures all contrary to the Principles. (16) Further, any change to rates and conditions as they existed are to be achieved as part of a genuine restructuring process (see the Full Bench decision at 72 WAIG 25). (17) The Wage Fixing Principles required that a restructuring process be undertaken by a process of consultation and co-operation. If Robe River were to achieve the restructuring process, it would have done so without engaging in the consultation and co-operative process required by the Princi- ples. As a matter of fact, there had ten a failure to consult, as the Full Bench found. (18) Since the Commission was bound to reject the Robe proposals, it mattered not what regard it had in relation to Robe's motives in withdrawing from the Industrial Agreement. The Commission was required to apply the First Award Principle, which it did. (19) The Work Value Principle does not apply, nor does the Conditions of Employment Principle. (20) Hence, the Commission was bound to do as it did (see 71 WAIG 582 at 617). In any event, even if it had not considered the motives of Robe, it would have arrived at that decision in the sense that there was no other decision to arrive at. Put another way, if the Commission had made a different decision ((ie) one to issue an award reflecting rates and conditions other than existing rates and conditions), then the decision would have ten erroneous, because it would have ten made outside the bounds of a reasonable exercise of discretion. 2648 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 73 W.A.I.G. (21) The Commission could not possibly, when apply- ing the Wage Fixing Principles to the undisputed facts, properly come to a different decision, because to do so would have been in disregard of the Wage Fixing Principles, In reply, Mr Dixon submitted that the Industrial Appeal Court had said that the decision at first instance was void, and if it was void then it was not open to the Full Bench to examine the factual basis or the conclusions of facts reached at first instance. Secondly, those findings were tainted in the same way as any other finding by the denial of natural justice, because the denial extended to a matter which permeated or dominated the decision at first instance. Further, it could not be said that the Principles would make a rehearing a futility, because the Commission itself made some changes and a number of changes might properly have been made. Conclusions. It is quite clear, as Mr LeMiere said, that, at the time the Commission dealt with this matter, as a result of the 1989 State Wage Decision, the Principles which had to apply were:— (1) The First Award Principle. (2) The Structural Efficiency Principle. (3) The prohibition on negative cost-cutting exer- cises. (4) The direction to parties making application or concerned in the Structural Efficiency Principle applications that they embark on a process of co-operation and consultation. It is quite clear that the Robe proposal was one to reduce the conditions of the employees, and it was not sought to be done in accordance with the Principles. Secondly, as was found, to a large extent, the Robe proposal was a negative cost-cutting exercise. Thirdly, the Structural Efficiency Principle required co-operation and consultation, and that had not occurred, and to make any order in terms of the Robe River proposal would be to act contrary to the Principles. It is quite wrong to say, as Mr Dixon submitted, and it would make a nonsense of the direction of the Industrial Appeal Court, if we were to do it, that we cannot consider the findings of fact made at first instance. It is the law that the Commission shall not act or make decisions in disregard of the Principles (see CWAI v. FMWU 69 WAIG 3219 at 3226 and In Re the