Applications to Vary the Transport Industry – Car Carriers (State) Contract Determination [2022] NSWIRComm 1048 - NSWIRComm 2022 case summary

Principles to apply

In Applications to Vary the Transport Industry - General Carriers Contract Determination 2017 and Transport Industry - Courier and Taxi Contract Determination [2022] NSWIRComm 1003, I set out the principles to apply in making a variation to a contract determination in these terms: "8. In relation to the making or variation of contract determinations the Industrial Relations Act 1996 relevantly provides: 313 Jurisdiction of Commission with respect to contracts of carriage (1) The Commission may inquire into any matter arising under contracts of carriage and may make a contract determination with respect to remuneration of the carrier, and any condition, under such a contract. … 316 Making of contract determinations (1) After hearing an application for it to exercise its jurisdiction under this Part, the Commission may: (a) dismiss the application, or (b) make a contract determination with respect to the application. (2) When the Commission makes a contract determination: (a) it may defer the operation of the determination wholly or in part for such period or periods as it thinks fit, and (b) it must specify the class or classes of contracts in respect of which the determination is to operate (including classes defined by reference to a named bailor or principal contractor). … 320 Variation or rescission of determinations The Commission may vary or rescind a contract determination and, when it rescinds a determination, it may replace that determination with a new determination. 9. In exercising these powers the Commission is constrained by s 146(2) of the Act, which provides: 146 General functions of Commission (1) … (2) The Commission must take into account the public interest in the exercise of its functions and, for that purpose, must have regard to - (a) the objects of this Act, and (b) the state of the economy of New South Wales and the likely effect of its decisions on that economy. 10. The objects of the Act are set out in s 3 of the Act as follows: 3 Objects The objects of this Act are as follows - (a) to provide a framework for the conduct of industrial relations that is fair and just, (b) to promote efficiency and productivity in the economy of the State, (c) to promote participation in industrial relations by employees and employers at an enterprise or workplace level, (d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies, (e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments, (f) to prevent and eliminate discrimination in the workplace and in particular to ensure equal remuneration for men and women doing work of equal or comparable value, (g) to provide for the resolution of industrial disputes by conciliation and, if necessary, by arbitration in a prompt and fair manner and with a minimum of legal technicality, (h) to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations. 11. In Transport Industry - General Carriers Contract Determination [2016] NSWIRComm 3, Kite AJ (as he then was) observed: "30. A number of parties made reference to the decision of Haylen J in Transport Industry - General Carriers Contract Determination Application by Australian Road Transport Industrial Organisation, New South Wales Branch for removal of Special Fuel Price Surcharge [2010] NSWIRComm 133 ('Special Fuel Price Surcharge Case'). In that matter his Honour stated at [16]: There was no dispute between the parties that there was a general and wide discretion provided by s 320 of the Act to vary a Determination. It was broadly accepted that, in exercising that power to vary a Determination, the Commission may be guided by similar considerations contained within s 10 and s 17, namely, that the Determination should set fair and reasonable rates and that in making a variation, the public interest is to be considered provided there is a substantial reason for making the variation. … 34. It has long been recognized that Industrial Tribunals are in a different position to the general courts. The duty of the Commission is to make an award or determination which prescribes fair and reasonable rates and conditions. In doing so the Commission is not bound by the rules of evidence or to act in a formal manner but 'is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.' See s 163 (1)(c) of the Act. 35. The various authorities referring to the 'onus' [borne] by a party are to be understood in that context. There must be information before the Commission which allows it to be satisfied that the determination or award, if made, will provide just and reasonable rates and conditions. The assessment of the adequacy of that material will vary according to the nature of the case, including the degree of consent, before the Commission: see In re Butchers, Wholesale (Cumberland) Award 1971 AR 425 especially at 437- 440. 36. I intend to approach the matter in that light. … 41. I was not directed to any authority which held the Commission's award making principles applied to Contract Determinations. I accept however that reference to those principles is consistent with the approach outlined by Haylen J in the Special Fuel Price Surcharge Case." (Emphasis in original) 12. In Transport Industry - General Carriers Contract Determination 2017 [2017] NSWIRComm 1013 Newall C: (1) accepted as correct the proposition derived from Transport Industry - General Carriers Contract Determination Application by Australian Road Transport Industrial Organisation, New South Wales Branch for removal of Special Fuel Price Surcharge [2010] NSWIRComm 133 that in exercising the power to vary a contract determination the Commission may be guided by similar considerations to those arising in respect of ss 10 and 17 of the Act: at [12]; (2) observed that, like an award, a contract determination ought to set fair and reasonable rates. The overarching duty of the Commission when it is dealing with the setting of rates and conditions is that it must make rates and conditions which are fair and reasonable: see [12] and [16]; and (3) the consent of the parties to an application to make or vary a contract determination is important and relevant, but is not of itself determinative. Ultimately the Commission must exercise its powers under the Act effectively regardless of the consent of the parties: at [15]."

Determination

Ai Group relied on a statement by Dean Roberts, the State Manager for NSW and ACT for CEVA Logistics. In his statement Mr Roberts provided an overview of the car carrying industry in New South Wales and of the business conducted by CEVA Logistics in that industry. He described the changes that have occurred since the making of the Contract Determination on 23 May 2008, which he said "have brought about periods of decline in work volumes and revenue for CEVA and the car carrying industry generally". These changes were said to include: 1. a reduction in the storage and processing services provided by the "major" principal contractors (namely, CEVA Logistics, Autocare and Prixcar Services) and associated revenue; 2. changes to the locations between which vehicles are transported; 3. the relocation of facilities operated by the major principal contractors; 4. a greater focus on transport costs, rather than other service offerings or KPIs, in commercial negotiations between the major principal contractors and original equipment manufacturers; 5. limits on the ability of the industry to make optimum utilisation of trailers with particular carrying capacity due to increases in the dimensions of certain vehicles now commonly being transported. That is, over recent years, there has been a decreased ability to fully load certain trailer configurations when carrying certain types of larger vehicles; and 6. component and raw material shortages that have disrupted vehicle manufacturing supply chains which have resulted in reduced numbers of vehicles being delivered to Australia.
I observe that this is very much a summary of Mr Roberts' evidence in respect of these matters.
Mr Roberts stated that these changes have been compounded by the effects of COVID-19. He also drew attention to the recent significant and well-publicised increases in the cost of fuel.
Mr Roberts provided a brief overview of the negotiations that have occurred between the parties since early 2018, including in these proceedings. He described a challenging and sometimes volatile process which included the taking of industrial action by contract carriers. He concluded: "45. Significant time and resources have been spent by the parties in seeking to resolve ongoing issues with the contract determination. The Commission itself has also devoted significant resources to this process. The agreed position reflects a level of compromise by all parties."
In submissions filed in support of the changes sought to the Contract Determination, Ai Group set out how the proposed variations would address some of the challenges identified by Mr Roberts. The proposed variations are conveniently summarised in par 28 of those submissions as follows: "28. This Agreed Variation would amend the Contract Determination to reflect a settlement position reached between Ai Group, the TWU and Autocare. The relevant variations would: a. Provide for increases to the rates of pay prescribed in the Contract Determination. The quantum of the increase differs depending upon the type of work undertaken. The rate of increase for Port Kembla work is notably smaller than for other types of work; b. Introduce a new rate of pay for 7 car carriers undertaking intrastate work; c. Increase the deductions that can be made on account of damage to vehicles being transported, in a proportionate manner to the rate of increases implemented in tables A, B and C. d. Re-set the benchmarks contained in the 'rise and fall formula' in sub- clause (vii) of Schedule 1 of the Contract Determination to figures current as of September 2021; e. Introduce two new tables of deemed distances in Table I and Table J for journeys connected to Kembla Grange or Minto and enable Principal Contractors to pay Contract Carriers (on a CPK basis) according to such tables; f. Make consequential amendments to clause 8 of the Contract Determination on account of the introduction of the deemed distances and further amend that provision to accommodate payment for kilometres actually travelled in the context of deviations. g. Establish a mechanism for dealing with circumstances where a Contract Carrier contends that a journey cannot be safely undertaken via the route assumed under the 'deemed distances' specified in the contract determination. h. Establish a mechanism enabling a Principal Contractor to pay a shorter number of kilometres than the tables of deemed distances would require where this becomes possible due to establishment of new or improved roads, subject to appropriate safeguards. i. Introduce a new sub-clause 7(i)(d) which would enable deductions to be made to remuneration otherwise payable to Contract Carriers where the Principal Contractor has introduced arrangements allowing for the supply of fuel. j. Alter the quantum of the reduction available under clause (ii) of Schedule 1 in accordance with the formula in sub-clause (v) and in response to the changed fuel tax credit rate."
By way of further explanation of the rationale for some of the proposed variations, Ai Group submitted that: 1. The rates of pay in Tables A, B and C of the Contract Determination will be increased by 9.06% and those in Tables D, E and F by 4%, utilising the rates published by the Commission on 28 November 2018. Ai Group submitted that: "31. The bifurcated increases sought through the proposed variations reflect a consent position reached between the parties. The outcome does not result in the reduction to the rate for Port Kembla work as initially proposed by Ai Group. Nonetheless, the lower level of rate increase for the 'Port Kembla' rates compared to what might be said to be justified by reference to the formula for calculating such increases would go some way to addressing concerns raised by Ai Group as to inaccuracies in the assumptions underpinning the current rates. It also affords some improvement to the current level of remuneration for such work, in recognition of TWU concerns over the rising costs incurred by Contract Carriers. 32. In short, the proposed variations reflect a fair and appropriate compromise by each of the parties. They better align the terms of the instrument with the contemporary circumstances in the industry while also generally providing improved rates of pay for contract carriers. Such compromise has been reached in a context where both Principal Contractors and Contract Carriers have been experiencing difficulties flowing from effects of the Covid 19 pandemic, changes to the nature of work carried out in the car carrying industry and altered trading conditions for the sector." 1. New "deemed distances" tables - Tables I and J - would be inserted to reflect, in large part, the movement of the primary site for imports of new vehicles from Glebe Island and Darling Harbour to Port Kembla. They also recognise that with the cessation of the manufacture of passenger vehicles in Australia, journeys are no longer undertaken from car manufacturing facilities to relevant dealerships. 2. Proposed new cl 7(1)(d) would enable a principal contractor to deduct from amounts that would otherwise be owing to contract carriers, a quantum equal to payments made by the principal contractor for fuel supplied for the benefit of the contract carrier. 3. The proposed variations would amend the maximum reduction available under cl (ii)(c) of Schedule 1 to reflect the most recent rebate available from the Commonwealth Government at the time of the variation.
In the proceedings today, Mr Aykut, who appeared for the TWU, confirmed that the union supported and relied upon the submissions that had been made by Ai Group.
It is relevant, and I place significant weight on the fact, that the parties are before me today having reached a consent position. I would not consider that industrial organisations such as the TWU or Ai Group would be advocating such a position, were they not satisfied that it was in their respective members' interests.
From my involvement in these proceedings since their inception and having regard to the evidence and submissions, I am satisfied that the variations sought to be made to the Contract Determination would result in fair and reasonable conditions for the contract carriers to whom it applies.
It is an appropriate exercise of my discretion to make the orders sought to give effect to these variations.

Applications to Vary the Transport Industry – Car Carriers (State) Contract Determination [2022] NSWIRComm 1048

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Judgment (5 paragraphs)

Cases Cited (4)