Applications to vary the Transport Industry – General Carriers Contract Determination 2017 and Transport Industry – Courier and Taxi Truck Contract Determination [2022] NSWIRComm 1003

Principles to apply

1. With the parties having reached a consent position, the principles to be applied by the Commission in determining whether or not to give effect to the agreed position can be shortly stated.
2. 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.
3. 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.
4. 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.
5. 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)
6. 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].

Consideration

1. NSWBC's Submissions summarise the orders sought from the Commission as follows: "2.2 In essence, the changes sought: (a) increase the rates of remuneration in the CTTCD with an extended phasing-in; and (b) insert these increased rates of remuneration into the GCCD for vehicles with a carrying capacity of up to and including 3 tonnes (Light Vehicles) (collectively, the Proposed Rates). 2.3 The changes sought also: (a) remove provisions dealing with 'Exclusive Hire' from the CTTCD; (b) remove provisions dealing with 'Probationary Periods' from the CTTCD; (c) remove the fuel levy provisions from the CTTCD; (d) rescind the CTTSCD (as the Proposed Rates include a component to compensate the Principal Contractor [sic - contract carrier] for superannuation); and (e) make any consequential amendments required to give effect to the Proposed Rates." (Emphasis in original)
2. The variations sought to be made to the GCCD were articulated in detail in Appendix A to NSWBC's Submissions. They were each explained in a table contained within the submissions.
3. The variations sought to be made to the CTTCD were articulated in detail in Appendix C to NSWBC's Submissions. Again, they were each explained in a table contained within the submissions.
4. NSWBC read an affidavit of Nigel Ward, the CEO and a Director of Australian Business Lawyers & Advisors, which is described in the affidavit as an incorporated legal practice wholly owned by NSWBC. The substance of that affidavit, and the matters to which the Commission ought to have regard in considering the new rates to be included in the GCCD and CTTCD, were summarised in NSWBC's Submissions as follows: "Witness Statement of N Ward 4.13 The Commission should rely on the statement of evidence filed by Mr N Ward in these proceedings. That statement supports the view that the proposed rates are fair and reasonable because it attests to the fact that: (a) Mr Ward was the architect of the cost and rate model used for the GCCD; (b) Mr Ward is regarded as an expert in Contract Carrier cost and rate modelling having built models in diverse segments of the transport sector for over 30 years; (c) Mr Ward initially used the GCCD model to assist the parties in their discussions concerning under 2 tonne rates; (d) Such modelling (based on differing cost inputs) produced cartage rates for a benchmark '2 tonne vehicle' of between $37 and $42 an hour; (e) Those representing principal contractors undertook extensive engagement with members concerning actual market rates paid today and the affordability of alternative higher rates; (f) This engagement involved a diverse cross section of the general freight and courier sectors and included most of the major courier companies in NSW; (g) The TWU independently modelled cartage rates for a benchmark '2 tonne vehicle' and also consulted extensively with its members on actual costs incurred in providing a vehicle and labour to perform cartage work; and (h) The Proposed Rates were derived through negotiation (assisted by the Commission) from this sophisticated and detailed investigation, analysis and consultation process. Appropriateness of Rates 4.14 The rates of remuneration currently in the GCCD were calculated with a detailed cost model that factored in the fixed and variable costs that a contract carrier could reasonably be expected to incur when completing a contract of carriage. 4.15 Newall C indicated that this approach provided a proper justification for the rates within the GCCD, which he found to be a fair and reasonable safety net of cartage rates for contract carriers. 4.16 While the Proposed Rates have not been calculated mechanically from the cost model, there is good reason for this approach. 4.17 The circumstances applying to contract carriers operating Light Vehicles are markedly different from those operating trucks with carrying capacities in excess of 3 tonnes (Heavy Vehicles). 4.18 Heavy Vehicles require the operator to hold a specialist driver licence (LR or above). Light Vehicles generally require only a standard C class licence to operate. 4.19 The Heavy Vehicles provided for in the GCCD are specialised vehicles that are designed for the transportation of goods. The vehicles are assets that have been purchased for this purpose and are generally used only for the performance of contracts of carriage in the course of business. 4.20 In contrast, Light Vehicles such as cars, vans and utility vehicles are not limited to business usage. Contract carriers who operate such vehicles will often also use them for personal transportation. It is far less likely that the asset was purchased [solely] for the performance of contracts of carriage. 4.21 There are differences in the hours worked by, and costs incurred by, contract carriers operating Light Vehicles compared to those operating Heavy Vehicles. 4.22 For example, many of the costs incurred by contract carriers operating Heavy Vehicles do not apply to Light Vehicles (e.g. training and accreditation costs associated with the National Heavy Vehicle Regulations). 4.23 As a result, the cost model designed for Heavy Vehicles in the GCCD while informative was not seen as a 'neat fit" for Light Vehicles and a such a more qualitive process of evaluation and determination in addition to modelling was seen as desirable and necessary. 4.24 Inserting the revised CTTD rates into the GCCD: (a) implements a classification structure that has historically been used for Light Vehicles; (b) applies rates that have been calculated specifically with the use of Light Vehicles in mind; and (c) creates the additional benefits that arise from consistency between the rates in each determination (which has been an ever-present objective of all parties). 4.25 The revised CTTD rates have been developed with reference to the following factors: (a) the relevant components of the cost model used to calculate the rates of remuneration for Heavy Vehicles; (b) the market rates that are currently paid for contracts of carriage performed by Light Vehicles under the GCCD/CTTCD; (c) the period since the GCCD was varied, leaving no minimum rates of remuneration for contracts of carriage undertaken by Light Vehicles; and (d) the period since the CTTCD was last varied, it being uncontroversial that this has resulted in rates that are too low in the context of the market and cost recovery. Phasing of Rates 4.26 The Proposed rates are to be phased in between January 2022 and July 2024. This balances the needs of contract carriers to receive an increase in the rates of remuneration with the effects that such significant increases may have on the business of principal contractor; including the need to have time to adjust commercial pricing in customer contracts." (Emphasis in original)
5. NSWBC further submitted that the following matters should inform the exercise of the Commission's discretion in these proceedings: 1. the significant history of these proceedings. In particular, the decision of Newall C in 2017 varied the GCCD to remove minimum rates for vehicles with a carrying capacity of up to 2 tonnes. This was as a result of the compromise reached between the parties. The parties did not intend for the removal of those rates to be permanent, and discussions have been ongoing in an effort to find a suitable alternative since that time; and 2. the depth of conciliations that have resulted in the changes sought. The many conciliations have been attended by representatives for the TWU and peak employer associations, as well as principal contractors and contract carriers themselves. The Commission is entitled to take into account the extensive discussions concerning engagement with members by representative organisations advanced in the conciliations that informed the commercial viability of the proposed rates and their fairness to contract carriers.
6. At today's hearing, Mr Ward, who appeared for NSWBC, ARTIO and Toll Group, supplemented the NSWBC's Submissions with short oral submissions. While in large part those submissions amplified the written ones, one matter bears noting. Mr Ward drew my attention to the fact that the consent position advanced by the parties resolves a longstanding challenge in the industry, namely aligning the terms and conditions of the GCCD and the CTTCD, to the extent that they apply to light vehicles. He submitted, and I agree, that it was "no small feat" to reach agreement on the alignment of both vehicle configurations and cartage rates across the two instruments.
7. Mr Webb, who appeared for the TWU, submitted that the union relied substantially on the evidence and submissions filed by NSWBC. He noted, however, a number of matters, including: 1. the TWU did not necessarily accept the NSWBC's Submissions at par 4.16 and 4.23 (reproduced at [16] above) that the cost model used to derive the rates in the GCCD was not appropriate for present purposes; 2. the proposed rates are the product of compromise, rather than "exact science". The TWU does not accept that the rates represent "true cost recovery"; 3. however, despite these reservations the TWU accepts that the proposed rates are fair and reasonable; 4. there is an imperative for the Commission to set fair and reasonable rates, not only to address the delay since the rates in the CTTCD were last adjusted, but also to address the TWU's contention that the provision of fair and reasonable rates is a precondition to a carrier being able to undertake their duties safely; and 5. there is a public interest in the GCCD and the CTTCD being amended in the terms sought.
8. The Commission also received written submissions on behalf of Crisis Couriers and ABC Couriers. Those submissions included the following: "3. In considering the applications in relation to the Transport Industry Courier and Taxi Truck Contract Determination (CTTCD), and the Transport Industry General Carriers Contract Determination (GCCD), the Commission has been is able to [sic] observe that: (a) The CTTCD has not been varied in relation to rates for many years; (b) The absence of light vehicle rates from the GCCD; and (c) The parties have had many conferences about the issues (most of which the Commission has chaired) and the Commission has been able to become familiar with the matters in issue and facilitate the efforts of the parties to arrive at a settlement consistent with Section 315. 4. In the circumstances, the Commission can be satisfied that it is in a position to exercise its discretion and power under Section 320 to vary both determinations. 5. Crisis Couriers and ABC Couriers have a particular interest in the continued operation of the CTTCD and submit in the circumstances that the necessary steps have been taken by the Commission, to place it in the position to make the determinations sought in the terms now agreed between the parties. 6. The graduated increase of the rates introduced by the proposed amendments in both determinations are appropriate in the circumstances as are the associated amendments to definitions and categories of vehicles which better reflect current vehicle usage under the determinations. 7. Insofar as termination of the Transport Industry Courier and Taxi Truck (Superannuation) Contract Determination is concerned, section 330 [sic] permits that course of action which is appropriate in the circumstances. Having regard to the incorporation of the superannuation component together with the fuel levy component into the new agreed rates together with the new superannuation provision in both the CTTCD and the GCCD, the termination of the superannuation determination is justified as it will have no useful ongoing function."
9. From my involvement in these proceedings since their inception, and having regard to the parties' submissions and evidence, I am satisfied that the variations proposed to be made to the GCCD and the CTTCD would result in fair and reasonable conditions for the contract carriers to whom they apply. It is an appropriate exercise of my discretion to make the orders sought to give effect to those variations.
10. I am further satisfied that as the proposed rates include a component to compensate contract carriers for superannuation, it is appropriate that the CTTSCD be rescinded.

Orders and directions

1. I order that pursuant to s 320 of the Industrial Relations Act 1996: 1. the Transport Industry - General Carriers Contract Determination 2017 be varied in accordance with Appendix A to the Submissions of NSW Business Chamber Limited dated 17 February 2022 (Exhibit NSWBC 1); 2. the Transport Industry - Courier and Taxi Truck Contract Determination be varied in accordance with Appendix C to the Submissions of NSW Business Chamber Limited dated 17 February 2022 (Exhibit NSWBC 2); and 3. the Transport Industry - Courier and Taxi Truck (Superannuation) Contract Determination be rescinded.
2. These orders take effect on 1 March 2022.
3. I direct that: 1. all current directions are vacated; 2. the parties confer with a view to agreeing on short minutes to give effect to these orders; 3. agreed short minutes be filed with the Commission by 4.00pm on Wednesday, 23 February 2022; and 4. in the event that short minutes cannot be agreed, the parties have liberty to apply on reasonable notice. Damian Sloan Commissioner

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 February 2022