Held; Commission's powers under s 314 of the Act - similarity to unfair dismissal jurisdiction - similar principles apply as to unfairness in terminating contracts - substantive and procedural unfairness - applicant's evidence preferred - respondent's evidence unreliable - Jones v Dunkel inferences available - drivers not on strike - no threat to picket - desire to negotiate rate increase - no opportunity to defend allegations - allegation of unreliability not sustained - no warnings of poor performance or refusal to work - no warning of termination of contract - three warnings in quick succession unacceptable - principal contractor refused to recognise Union official or allow his representation of drivers - breach of agreements - termination of contracts su - [2008] NSWIRComm 55 - NSWIRComm 2008 case summary

Judgment (60 paragraphs)

[1]

CITATION: Transport Workers' Union of New South Wales (on behalf of TWS NSW Pty Ltd and Ready Transport) and Smartskip (NSW) Pty Ltd [2008] NSWIRComm 55

[2]

APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT Smartskip (NSW) Pty Ltd

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Applications for compensation arising from termination of contracts of carriage - contracts for the carriage of waste - delivering, collection and transfer of waste bins - provisions of contracts - letters of warning - failure to comply with terms of contracts - rates under the contract - rising fuel costs - withdrawal of fuel card - increased travel distances - rates said to be unsustainable - drivers request to increase rates - Union called in to negotiate increase in rates - Union official denied representation and ordered from site - allegations of refusing work - whether drivers on strike - threat to picket - drivers' contracts terminated. CATCHWORDS: Held; Commission's powers under s 314 of the Act - similarity to unfair dismissal jurisdiction - similar principles apply as to unfairness in terminating contracts - substantive and procedural unfairness - applicant's evidence preferred - respondent's evidence unreliable - Jones v Dunkel inferences available - drivers not on strike - no threat to picket - desire to negotiate rate increase - no opportunity to defend allegations - allegation of unreliability not sustained - no warnings of poor performance or refusal to work - no warning of termination of contract - three warnings in quick succession unacceptable - principal contractor refused to recognise Union official or allow his representation of drivers - breach of agreements - termination of contracts substantively and procedurally unfair - impracticality of reinstating contracts - maximum compensation ordered.

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LEGISLATION CITED: Industrial Relations Act 1996

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Buckman and Another v Burdekin Resources NL (1998) 85 IR 415 Byrne v Australian Airlines Limited (1995) 185 CLR 410 Cherry v Allied Express Transport (1997) 73 IR 305 CASES CITED: Humphries v Cootamundra Ex-Services and Citizens Memorial Club Ltd (2003) 128 IR 37 Jones v Dunkel (1959) 101 CLR 298 Outboard World Pty Limited t/as Budget Waste Control (Sydney) v Muir (1993) 51 IR 167 Transport Industry - General Carriers Contract Determination (361 IG 1478)

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HEARING DATES: 14 February 2008; 15 February 2008

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APPLICANT Mr M Aird Transport Workers' Union of New South Wales LEGAL REPRESENTATIVES: RESPONDENT Mr J Xenos Xenos Lawyers

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37 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

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Transport Workers' Union of New South Wales on behalf of TWS NSW Pty Ltd and Smartskip (NSW) Pty Ltd

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Application by Transport Workers' Union of New South Wales on behalf of its member TWS NSW Pty Ltd for a contract determination of reinstatement pursuant to section 314 of the Industrial Relations Act 1996

[11]

Transport Workers' Union of New South Wales on behalf of Ready Transport and Smartskip (NSW) Pty Ltd

[12]

Application by Transport Workers' Union of New South Wales on behalf of its member Ready Transport for a contract determination of reinstatement pursuant to section 314 of the Industrial Relations Act 1996 DECISION [2008] NSWIRComm 55 1 This decision determines two applications filed by the Transport Workers' Union of New South Wales ('the Union') under s 314 of the Industrial Relations Act 1996 ('the Act'). The applications are brought on behalf of two of the Union's contract driver members, Mr Mark Thomlinson t/as TWS NSW Pty Ltd and Mr Michael Sztajniger t/as Ready Transport ('the applicants') and seek compensation from Smartskip Pty Ltd ('the respondent') following the termination of the applicants' contracts of carriage with the respondent. 2 The applications were listed for conciliation on numerous occasions in the second half of 2007. However, the claims of the applicants could not be settled and were finally listed for hearing in February 2008. Both applicants seek compensation of six months remuneration on the grounds that reinstatement of their contracts would be impractical (s 314(4)). The Contracts 3 Both applicants' contracts were in identical terms and were executed by TWS NSW Pty Ltd and Ready Transport in June and July 2005 for four and three year terms respectively with an option to extend. 4 The contracts provide for the carrier to make his "vehicle available for the carriage of waste at all times and upon the basis agreed with the Company from time to time" and for six days per week. 5 Clause 17 is the provision which the respondent presumably relied upon to terminate the contracts. It is expressed as follows: The Company may terminate this agreement immediately if in the opinion of the company, a) The carrier commits a serious breach of any of the terms and conditions of this agreement (either by act or omission), or ...

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It is also relevant that subclause (b) be referred to: b) The carrier fails to rectify within five (5) working days of notification by the company, any minor breach of any of the terms and conditions of this agreement or fails to observe or comply with any operational procedures or instructions issued by the company from time to time. 6 A schedule to the agreement identifies the rates of payment of each bin collected, emptied or returned. There is no provision for a review of the rates during the life of the contract. The letters of warning and termination of contracts 7 The applicants' contracts of carriage were terminated by the respondent on or about 11 July 2006. The circumstances surrounding the termination of the contracts will be explained in detail shortly. However, at this point, I reproduce the letters of warning and termination issued by the respondent. 8 The following three letters were all dated 11 July 2006 and issued to Mr Thomlinson by Mr Joe Brcic, the respondent's General Manager: First letter 11th July, 2006 Dear Mark Mark I am issuing you with a written warning following a verbal warning you received on Monday 10th July, 2006, for abandoning your employment and placing the company under pressure to meet its obligations to its clients. As a contract driver it is your duty to report for work and accept all delivery runs allocated to you.

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Second letter Dear Mark This is a final warning. You have again abandoned your employment by not turning up for work on Tuesday 11th July, 2006. You are required to report for work Wednesday morning 12th July, 2006. Following our conversation last night (11th July, 2006) I am pleased that you are happy and have accepted my offer to assist you during your time of financial difficulty.

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Third letter Mark I regret to inform you that your position as a contract driver for Smartskip has been terminated effective immediately as you have again for the third time refused your duty. The company requires your truck immediately in our yard so that the lifting equipment can be removed. 9 The following two letters were both dated 13 July 2006, and issued to Mr Sztajniger by Mr Brcic:

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First letter Mr Michael Sztajniger Dear Mick As you have refused to return back to work I am forced to give you your second and final warning. You are required to report for work Thursday morning 13th July, 2006.

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Second letter Mr Michael Sztajniger Dear Mick I regretfully advise you that your position as a contract driver for our company is no longer sustainable. Further to our conversation yesterday the company cannot move forward with you due to your unreliability in running your business as a contractor. We cannot continue to finance your financial obligations as you are a contractor. Could you please return to our yard on Monday, 17th July, 2006, as agreed, to have the lifting equipment removed and once removed we will organise payment of monies owed to you. THE EVIDENCE Background 10 Mr Mark Thomlinson has had 25 years experience in the trucking industry. In mid March 2005, Mr Thomlinson responded to a newspaper advertisement of a truck for sale with a contract. The truck was a 1994 International eight wheeler in reasonable condition with 350,000 km on the clock. The truck was used to pick up and deliver skip bins for the respondent and had a capacity of 15 tonnes. Mr Thomlinson paid $65,000 for the truck only. The hook lift system was owned by the respondent. 11 The respondent's then General Manager, Mr Rodney Born, told Mr Thomlinson that he could make a minimum of $3,500 a week doing six to eight jobs a day in a radius of five kilometres from the depot at Silverwater. Each job was worth $85. This was confirmed when Mr Born showed Mr Thomlinson a computer spreadsheet of the work involved. Mr Born also told Mr Thomlinson that he would have preference over company drivers and he would receive a discounted company fuel card. The contract was for four years, with an option to extend, although Mr Thomlinson deposed that he received no documentation at the time. After two weeks training, Mr Thomlinson arranged finance and commenced work on 9 May 2005. In negotiating finance, Mr Thomlinson obtained a letter from the respondent, which estimated six to eight jobs a day, at approximately $3,500 per week. On or about 13 April 2005, Mr Thomlinson signed a four year contract on behalf of his Company and had the contract checked by his accountant. 12 Mr Thomlinson said the rates were calculated as follows:

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9 metre bin - $40 per drop off or pick up $70 per change over (delivering an empty bin and collecting a full one)

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15 metre bin - $55 per drop off or pick up $85 per change over

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(These rates had been increased by $5 in April 2006.)

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These were flat rates, as Mr Thomlinson was required to pay for fuel, maintenance, insurance and wages. 13 For the first 12 months, Mr Thomlinson said he had earned around $181,000, with expenses of $105,000. He had worked six days a week, 72 hours per week for 52 weeks. The fuel card saved him approximately $500 to $600 per month. Mr Thomlinson said that when he tried to re-register his truck in 2006, he was told it was too "smokey" and he was required to rebuild the motor. He was told that the respondent's account could be used and he could repay the cost back to the Company of around $39,000. When the respondent baulked at this amount, Mr Thomlinson arranged for the work himself at a cost of around $18,000. His truck was off the road for about a month during this period. 14 Mr Michael Sztajniger had also responded to an advertisement in early 2005 for a "truck for sale with work". He spoke to Mr Born and arranged to meet him the same day. Mr Born told him the truck was a 1994 International. It would cost $67,000 plus GST. Mr Sztajniger was told the work involved picking up and removing skip bins, mainly in the Silverwater area. 15 Mr Born gave Mr Sztajniger a document dated 11 February 2005, headed "Estimation of Earnings" which stated that he would be earning a minimum of $10,000 per month. However, Mr Born had told him it was more likely to be $13,000 to $14,000 per month, Mr Sztajniger noted these figures on the document. Mr Sztajniger had been a truck driver for 20 years and from his experience, and after inspecting the truck, he considered it to be in reasonable condition for a ten year old vehicle. Mr Born also showed him invoices and running sheets for the truck which indicated seven to nine bins per day; mostly 15 metre bins. 16 Mr Sztajniger said he thought about the proposal for a few days, and based on what he had been told, he considered the purchase price of the truck was reasonable. He paid a deposit of $2,000 on 17 February 2005, but pulled out of the deal two weeks later when he was unable to obtain finance. Mr Born reduced the price to $55,000 and told him that the 15 metre bin changeover charge was increasing from $85 to $90 per bin. Mr Born guaranteed him local work and described the existing company driver as a "bludger" only doing seven to eight bins a day, whereas a contractor could do 10 to 11 bins. However, Mr Sztajniger decided not to proceed with the purchase. 17 A few months later, Mr Born rang Mr Sztajniger and said he had another truck for sale - a T987 T Line International for $40,000, plus GST. Mr Sztajniger inspected the truck and it appeared in good condition. Mr Born gave him the same assurances as before. Finance was arranged and Mr Sztajniger was given a contract in early July 2005 and he commenced work on 4 July 2005. 18 Mr Sztajniger grossed $129,000 in his first year, averaging $10,800 per month, lease payments were $1,800 and fuel $2,000 per month. He said that December 2005 and January 2006 were quiet months and he was only doing four to five bins a day. He had started to do longer distances even though another driver was put on at that time. Mr Sztajniger said things got worse in March / April and he started subsidising his run by doing garbage compactor work from City buildings. 19 Through April / May, Mr Sztajniger said he earned $10,000 per month and in June he earned $6,700. Mr Sztajniger said that when he complained to Mr Born about the reduced work he was told that the building industry was experiencing a lull, but business would pick up. However, it did not. Mr Born left the Company in March 2006 and was replaced by Mr Anthony Kamper. Mr Sztajniger said he constantly complained to Mr Kamper. However, Mr Kamper's attitude was that the drivers were making good money and were just "whingers". Mr Sztajniger asked for an advance on his income on two or three occasions when he fell behind in his lease payments and insurance. He received an advance of $2,000. A week before his contract was terminated, Mr Sztajniger asked for a $4,000 advance. However, a new Manager, Mr Joe Brcic refused. Events leading to the termination of the contracts 20 Mr Thomlinson said that when he returned after his truck had been off the road for a month, the work dropped off from approximately 10 changeovers per day to two or three and he was required to travel longer distances. Mr Thomlinson believed that the company drivers were doing the shorter runs. During the final two or three weeks, Mr Thomlinson said he earned about $1,500 per week. Two other contractors also found themselves in the same position. Around this time, a fourth contractor also came on board. The four of them held a meeting and decided their rates needed to be reviewed due to the reduced work and increased fuel costs. The contractors approached the Union and Mr Thomlinson wrote a letter to the new manager, Mr Brcic on 10 July 2006, explaining their situation and requesting an increase in the rates. 21 On 11 July, the four contractors met with Mr Brcic at 6:00am. Mr Thomlinson deposed that Mr Brcic offered him a 10% increase, but refused to reinstate the fuel card or review the rate structure. Mr Thomlinson rang Mr Darcy Waller from the Union and asked him to attend the site to assist in the negotiations. When Mr Waller arrived he was told by Mr Kamper that the respondent would not negotiate with the Union or allow the Union to be represented in the negotiations. Mr Thomlinson said Mr Waller was ordered off the site. 22 Around 8:00am that day, each of the drivers told Mr Brcic they would not take their trucks out until the matter was resolved. Mr Brcic told Mr Thomlinson in Mr Kamper's presence "I will make an example of you". Mr Thomlinson then received three letters, all dated the same day, stating he was to be terminated for refusing to work. 23 Mr Thomlinson said the situation was unsustainable when he was making $3,000 per month and with rising fuel and running costs. He attached to his statement a list of customers, hours worked and kilometres travelled. 24 After his termination, Mr Thomlinson had no work for six weeks. He has since obtained work as an employed driver earning around $460 per week. He was forced to sell his truck and he is still paying off the repair bill. 25 In examination in chief, Mr Thomlinson further detailed the events of the morning of 11 July 2006. Mr Waller had attended a meeting with the drivers at a coffee shop about 50 metres from the yard. He said that after Mr Brcic had offered a 10% increase which had been rejected, he and Mr Waller approached Mr Brcic, and Mr Brcic threatened to call the police if Mr Waller did not leave the premises. When Mr Kamper attended the site, Mr Waller had told him and Mr Brcic that it was wrong to have dismissed him. 26 Mr Thomlinson identified the following documents which were tendered in evidence:

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c) Mr Thomlinson's Personal Tax Return for the year ending 30 June 2007; and

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d) Mr Thomlinson's invoices from January to May 2006. 27 Mr Thomlinson denied the references in Mr Brcic's statement that he (Mr Thomlinson) had told Mr Brcic that the drivers were on strike. He said he just wanted to negotiate with Mr Brcic. Mr Thomlinson maintained that he was terminated on the spot when he was handed three letters on 11 July 2006. 28 In cross-examination, Mr Thomlinson acknowledged that when he commenced working for the respondent, he did not have much knowledge or experience of the building industry. However, he had trusted Mr Born about the quoted figures of the work. 29 Mr Thomlinson agreed that for about six months after he commenced work for the respondent he had been earning $3,000 per week. He had been told by Mr Born that there was a recession in the building industry. After about six months he was earning $2,500 to $3,000 per week, until his truck was off the road in June for a month. Mr Thomlinson was questioned about his income and personal tax return and the earnings from the Company. He claimed his operating expenses were around $126,000. He said his income for the year ending June 2006 was around $180,000. However, he could not explain how his returns were made up, as he had left this to his accountant. 30 Mr Thomlinson was asked about Mr Warren Howard, the new allocator employed by the respondent in April 2006. Mr Howard had kept a dairy and Mr Thomlinson was asked why Mr Howard records him as "not performing work on 28 days of the 66 working days from 26 April to 12 July 2006". Mr Thomlinson denied he was not at work on a number of days claimed by Mr Howard. On other days, he could not recall if he was at work or not. He did recall his truck was off the road for most of June 2006. During this time, he had asked for Company work, but was told none was available. Mr Thomlinson said he could not recall various times in July when he was not at work. He remembered being injured when he fell down the stairs on or about 8 July. In re-examination, Mr Thomlinson said he virtually never had any contact with Mr Howard, as he always contacted the Senior Allocator, Eddie Frisca. Mr Thomlinson said that he sometimes left the site when no work was available. However, the Company had never raised any performance issues over his attendance. 31 Mr Thomlinson said that on 11 July, he had wanted to have the matter (about the rates) resolved. He agreed that on that day he had decided he was not going to perform bin duties under his contract, until the matter was resolved. Mr Thomlinson said that when fuel costs increased by 20% to 25% and other operating costs were much higher, he had simply raised the matter with the Company, but they had been dismissive. 32 It was Mr Sztajniger's evidence that "things came to a head" in June / July 2006. The four contractors decided to approach the Company and seek a rate increase of 10% to 15%. They were not making any money due to lack of work, increased fuel costs and being required to travel longer distances. The drivers approached Mr Waller for help. 33 On 11 July, the drivers approached Mr Brcic to seek an increase in rates. The Company would not speak to Mr Waller. Mr Sztajniger said he was then individually approached and asked to abandon his colleagues and come back to work. Mr Sztajniger refused because he thought it was not right and the rates on offer were unsustainable. At the end of the day, Mr Sztajniger was advised by letter that his contract was terminated for refusing work. After the termination, Mr Sztajniger made no further payments on his truck and the truck was repossessed in late August 2006. As a result, and with numerous other debts, Mr Sztajniger and his wife entered into voluntary bankruptcy and remain undischarged bankrupts. 34 In examination in chief, Mr Sztajniger said he received a warning letter on 11 July, and his dismissal letter the next day, even though all the letters were dated 13 July. 35 Mr Sztajniger recounted his version of the events of 11 July. Mr Thomlinson had told him Mr Waller was coming out to talk to Mr Kamper about their rates. Mr Sztajniger said that when he was called into the office by Mr Brcic and Mr Kamper he was told he was a "good bloke", he should go back to work and forget about Thomlinson, because "he was gone". When he refused, Mr Kamper "got a bit aggro" and said that he was unreliable. Mr Sztajniger said "hang on mate you call Eddie (the allocator) in now". Mr Frisca had said that "he (Mr Sztajniger) had never refused work". Mr Sztajniger said he was then given a second warning, although he had not received a first warning. Mr Sztajniger said he was told to come back the next morning. When he received his final letter, Mr Brcic had said that he was a "good bloke" and to call him in three months when "all this blows over" and he could get his job back. Mr Sztajniger said he could not believe this statement as he had just been dismissed. Mr Sztajniger insisted that there had been no discussion between the drivers about a picket line. 36 In cross-examination, Mr Sztajniger said that when he purchased the truck, Mr Born had told him he would earn a minimum of $10,000 a month and had shown him figures of $13,000 to $14,000, and up to $16,000 a month. Mr Sztajniger said he did not believe $10,000 gross was enough, but he had believed Mr Born to be "a man of his word". Mr Sztajniger said he was reasonably satisfied with the first six months. He agreed that in November 2005 he had made $13,843.50; December, $10,741; February 2006, $14,454; March, $14,000; May, $11,121; and June, $6,765. 37 Mr Sztajniger said he began complaining about the lack of work in January and February 2006. When he was sent to the Westpoint Blacktown job the expectation was up to seven bins a day. However, over about a two month period he had only done two to four bins. Nevertheless, he agreed most of his work had been local. Mr Sztajniger explained that his income of $6,700 in June 2006, was because his truck was off the road for a few days. It was a 10 year old truck and there were various mechanical issues with it.

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38 In cross-examination, Mr Sztajniger recounted the details of the conversation he had with Mr Brcic and Mr Kamper on 11 July. He was called into the office and told "your (sic) a smart guy, Mark is trouble. He has caused all this. He's the instigator". After he refused the offer (to return to work), Mr Kamper said "you're unreliable anyway. You don't come to work". Mr Sztajniger said " I'm reliable, call in the allocator (Eddie)". When asked if Mark was reliable, Mr Eddie Frisca said "he never knocked back work". Mr Brcic never mentioned anything about the building industry and never said that no promises had been made (about the amount of work). 39 Mr Sztajniger was asked if he knew Warren Howard was the allocator and whether he was aware that out of 66 working days, from 26 April to 12 July 2006, he was absent for a full or part day on 35 occasions. Mr Sztajniger said he found that very hard to believe as he had never knocked back any work. 40 When asked about a number of specific days, Mr Sztajniger said he could not recall, but if it had been raining or there was no work, he obviously did not work. Mr Sztajniger said that his reliability had never been questioned by the Company. 41 Mr Darcy Waller is the Union Organiser responsible for the Smartskip site. Mr Waller deposed that in July 2006, he was asked to meet with the drivers at Smartskip after they had told him their earnings were unsustainable and they were going broke. Three of the drivers had felt that the representations made to them before they started their contracts had not been delivered. Mr Waller had told them of the rates paid at Collex (a competitor of the respondent) of $104.45 for a local bin and $130.69 for an out of area bin. Consumer Price Index increases also apply in the Collex agreement. 42 Mr Waller said he had attended the site around 8:00am on 11 July and introduced himself to Mr Brcic. He had said that there was a problem they needed to sort out as the guys could not continue to lose money after the assurances they had been given. Mr Brcic replied that he had been an Organiser for the Construction, Forestry, Mining and Energy Union. The guys had a contract and he could not comment on past conversations (with previous managers). Mr Brcic had said that Mr Kamper was on his way over and they would discuss it when he arrived. When he did, Mr Kamper told him he was not welcome; he would not talk to him; they were independent contractors and could look after themselves. 43 Mr Waller replied that he had "right of entry" and the drivers were entitled to representation. He directed a comment to Mr Brcic that he had had no problems (with talking to him) earlier. Mr Waller said he remembered the conversation clearly because he was denied use of the toilet and was asked to leave the site. Mr Waller said he did not want to prevent the meeting with the Company so he asked Mr Thomlinson and Mr Sztajniger to keep him informed of what happened. He was later told they had been sacked. 44 In cross-examination, Mr Waller disputed Mr Brcic's version of the conversation and said that there was "no way" they had discussed, or even suggested a picket line. For the respondent 45 Mr Warren Howard is the respondent's allocator responsible for taking phone calls from customers and allocating work to the drivers. He maintained a diary of various drivers' absences from 26 April 2006 to 12 July 2006, and concluded that, out of a total of 66 working days during the period, Mr Thomlinson did not attend the respondent's premises to carry out his contract, either for a full or half day, for a total of 28 days, and Mr Sztajniger for 35 days. 46 In cross-examination, Mr Howard was asked why in one diary entry he wrote in the third person. He denied that someone else had written the entry. Mr Howard said he was aware Mr Thomlinson's truck had been off the road for the month of June. However, he didn't know if the Company was required to provide him with other work. Mr Howard said he was not aware of any disciplinary action taken against either driver for their failed attendances. Mr Howard agreed that the main allocator, Mr Eddie Frisca had dealt with the two applicants. 47 In re-examination, Mr Howard said he had kept a diary because "things seemed to be getting out of hand" and he wanted to keep a record. He explained that the drivers had become "narkier" and were unwilling to help. He believed their attitude changed when the work dropped off. 48 Mr Joseph Brcic is the respondent's General Manager. He commenced work at the site on 10 July 2006, after a week's training in Brisbane. Before this he had not previously met the applicants, nor had he been involved in the negotiation of their contracts. 49 Mr Brcic said that on either 10 or 11 July, he had been asked by Mr Sztajniger for an advance of $4,000 to pay his bills. Mr Sztajniger had also said he had no money for fuel. Mr Brcic said that as a contractor it was up to him to manage his finances. As he had only just started with the Company, he was not in a position to increase pay or give advances as he had been told it was against Company policy.

[25]

50 Mr Brcic said that on 11 July, in a discussion with the applicant, Mr Thomlinson said "we want more money otherwise we're leaving". Mr Brcic had replied "you have a contract and you need to abide by its terms". Mr Brcic said that Mr Sztajniger then said "unless we get more money we are on strike". Mr Brcic responded by saying "its not a question of being on strike". They had a contract and if it was not carried out, he would give a written warning of dismissal. Mr Brcic said he then typed up a written warning and gave it to Mr Thomlinson who then said "we refuse to go back to work". Mr Brcic said he then went back to the office and typed up a second letter which he handed to both of them saying "If you don't return to work in 24 hours I would have no option but to terminate your contracts". 51 Mr Brcic said that the next day when they both returned at 6:00am, he had asked if they were prepared to work. Mr Thomlinson said "no, we are going on strike until you give us more money". Mr Brcic said he went back to the office and typed a third letter terminating their contracts and gave it to them. He said Mr Thomlinson responded "you can shove your letters, the TWU are coming here to support us". When Mr Waller arrived, Mr Brcic deposed that Mr Waller said words to the effect, "there's more than one way to skin a cat. You can't do that, we will form a picket line outside your place." 52 Mr Brcic said Mr Waller threatened a picket line and attempted to set one up, but he was ignored by the other drivers. Mr Brcic said that when he offered the drivers to come back to work, Mr Sztajniger replied "I will not be working for these rates". 53 Mr Brcic maintained that according to the Company records, the drivers had had some really good months - well above the transport average. However, there had never been any guarantees and no promises had been made. He said that contract work was not constant and it depended on the amount of time a driver was prepared to put in and the state of the economy. 54 In cross-examination, Mr Brcic was asked about the Company structure. He agreed that although the respondent was part of the Wanless Group of Companies, the respondent ran separate offices and had its own employees. He described the Company as a "mid tier player". 55 Mr Brcic acknowledged that prior to him joining the Company, his experience was in the building and construction industry. However, he had been made aware of the award in the transport industry and believed the drivers were paid above the award. Mr Brcic explained that he believed the $85 bin rate was above the contract determination rate after being told so by a Mr Carlisle in Brisbane, during his induction. The flat rates balanced out when a bin was collected, say 5km away and another was 40km away. He attempted to compare it to the complex formula in the contract determination rate. 56 Mr Brcic could not recall denying Mr Waller access to the Company's time and wages records on 4 October 2006. Mr Brcic said he told Mr Waller he needed to seek the individual drivers' permission to access their records. He again denied refusing Mr Waller access after a pre-arranged time for a meeting had been agreed on 9 October 2006.

[26]

57 Mr Brcic said he did not believe the times and distances referred to in the schedule to Mr Thomlinson's statement were correct. For example, he said that Silverwater to South Strathfield is not 18km. Mr Brcic claimed that he was not aware that transport costs had increased significantly in the six months before he commenced with the respondent. He conceded that transportation costs had increased when he was shown Australian Bureau of Statistics figures. He accepted that the applicants' contracts did not provide for a "rise and fall" formula. 58 Mr Brcic could not recall if Mr Thomlinson had given him a letter on 10 July requesting he address the drivers' concerns with their rates. Mr Brcic insisted that the applicants had merely demanded more money, or they would not go back to work. Mr Brcic had replied that he needed time to consider it (a month) as he had only just started. He said he was being blackmailed. 59 Mr Brcic was referred to the sequence of events on 11 July. He said he could not recall if Mr Kamper had denied Mr Waller the right to represent the drivers. Mr Brcic claimed that he told Mr Waller he was still prepared to discuss the matter, if the drivers went back to work. But Mr Waller tried to stir up the other workers to strike, but had been unsuccessful. Mr Brcic said he knew how Unions operated and he had overheard what Mr Waller was saying to the other drivers. Mr Waller had made mention of a picket line. Mr Brcic believed that actually, Mr Waller had agreed with him, and had not agreed with his members. 60 As to the applicants' warning letters, Mr Brcic said that the third and final letter was given to Mr Thomlinson the next day before Mr Waller had arrived. Mr Brcic denied giving all three letters to Mr Thomlinson on the same day. He said that the date on the third letter, 11 July, was a mistake. 61 Mr Brcic agreed he had had a separate meeting with Mr Sztajniger and told him that Mark Thomlinson was a troublemaker, he should ignore him and go back to work. Mr Brcic denied saying he would "make an example" of Mr Thomlinson. Mr Brcic denied telling Mr Sztajniger's wife that her husband was a liar when she had rung him about an unpaid invoice for July. 62 Mr Brcic agreed that in October 2006, the bin rate was increased by $10 to $95 and now all drivers are on a permanent retainer of $12,000 per month. In re-examination, Mr Brcic explained how these new rates came about. He said the Company decided to change the lifting mechanisms on the trucks to cater for different size bins and that the Company had gone from losing a million dollars a year ago to a significant turnaround. He had therefore decided it was fair to give the drivers an increase. 63 Mr Brcic deposed that on the last occasion he had met with the applicants, he had offered them the opportunity to recommence their contracts, but they both refused. SUBMISSIONS 64 Mr M Aird, for the Union, submitted that the respondent had raised no jurisdictional issue as to whether the applicants met the definition of having a contract of carriage with the principal contractor. (Later Mr Xenos, for the respondent, conceded the Commission's jurisdiction in this case.) Mr Aird said that any orders which might be made in these matters should be made in favour of the corporate entities, rather than the individuals. 65 Mr Aird believed it was crucial to any finding of unfairness, for the Commission to assess the initial representations made to the applicants before they entered into their contracts and the fact that these representations were not realised. Mr Sztajniger was advised by Mr Born that he could earn $13,000 to $14,000 per month and that $10,000 was a minimum. Mr Thomlinson had been shown a spreadsheet which indicated he could do 10 jobs a day and earn around $15,000 per month. In addition, both drivers had received a fuel card, which was later withdrawn. Mr Aird said these representations were not met, despite the applicants committing themselves to the major investment of a truck. The applicants' invoices demonstrated a consistent pattern of income below what had been promised. With costs rising considerably after 12 months, their earnings continued to fall. Mr Aird contended that the rates paid to the applicants were manifestly inadequate and the contracts had no capacity for review. Mr Aird put that the applicants simply could not perform their contracts of carriage and a crisis situation had developed around June 2006. 66 Mr Aird said the applicants had sought to address their dire situation on numerous occasions, were rebuffed each time and ultimately dismissed. The drivers had legitimate concerns for contracts which they had entered into on a long term basis. They had trusted Mr Born's assurances and trusted that the Company would "do the right thing". 67 Mr Aird said that the Commission would prefer the evidence of Mr Waller to that of Mr Brcic as to what happened on 11 July 2006. Mr Waller's evidence was highly credible and believable. He was refused his right to represent the drivers and Mr Kamper had told him to leave the site. As Mr Kamper was not called to give evidence, a Jones v Dunkel inference arises ((1959) 101 CLR 298). Mr Aird submitted that Mr Brcic's allegation of Mr Waller threatening a picket line was nonsense. Mr Brcic could not hear what was being said and there was not enough people for a picket line anyway. Mr Brcic's claim of a willingness to talk in July was false, considering the attitude to, and treatment of Mr Waller, who wished to do just that. 68 Mr Aird submitted that Mr Thomlinson's evidence of distances and times he had travelled were not challenged, even when the respondent had such evidence for a considerable period of time. Mr Brcic's assertions in the witness box have no probative value at all. This evidence of Mr Thomlinson was uncontested and demonstrated underpayments of around 50%. 69 Mr Aird noted that while the applicants were in a crisis situation in July 2006, a short time later in October, Mr Brcic had increased rates from 11% to 27.3% and had proposed a retainer of $12,000 per month. 70 Mr Aird submitted that Mr Brcic's general credibility was in question. He had not known anything about the contract determination. Mr Waller's version of what happened on 11 July made complete sense. Mr Thomlinson said he had received three letters on the same day, 11 July, whereas Mr Brcic had said he issued two on one day and the third on the next day. However, Mr Thomlinson's evidence was corroborated by Mr Sztajniger. 71 Mr Aird submitted that Mr Howard's evidence should be given no weight at all. The reality was that the applicants were never warned or counselled about their performance or being unwilling to perform their contracts. A number of diary entries recorded by Mr Howard demonstrated his extreme prejudice towards the drivers. In any event, he had not been the allocator with whom the drivers dealt. The evidence was that not all Saturdays were worked, drivers might turn up and be sent home due to rain or no available work. 72 Mr Aird suggested that the conflict over whether the final incident was on 11 or 12 July is immaterial. Mr Thomlinson received three letters in quick succession and Mr Sztajniger received his dismissal notice the next day. 73 Mr Aird put that it was a denial of natural justice where an employee seeks representation and it is refused: See Cherry v Allied Express Transport (1997) 73 IR 305. 74 Mr Aird said that the conduct of the respondent was "outrageous" and that the termination of the applicants' contracts was at the harsher end of the scale. Accordingly, as reinstatement was impractical (both applicants had since sold their trucks), an order of six months compensation was appropriate. In Mr Thomlinson's case, he had only worked five of the last six months before his contract was terminated, so an average should be made, resulting in $12,649 per month, totalling $74,894.

[27]

For the respondent 75 Mr J Xenos submitted that it was wrong to suggest that there was no contest about the representations to the applicants before they commenced their contracts. Mr Sztajniger said he was told he could earn $13,000 to $14,000 per month with a minimum of $10,000, and Mr Thomlinson said he was shown a spreadsheet indicating earnings of around $15,000 per month. The evidence was that Mr Sztajniger earned $129,000 in the first 12 months and Mr Thomlinson had made $15,000 per month in his first 12 months. The fact was when the applicants worked less, as Mr Howard's diary notes record, they earned less. Mr Xenos submitted that the rates under the contracts were not manifestly inadequate or unjust. Indeed, the amounts which had been quoted by Mr Born, were achieved. 76 Mr Xenos contended that the Commission would accept that Mr Brcic needed time to review the position when he had only been the Manager for a day or two. When he did review the rates they were increased in October 2006, by 11.8% to 23.7%. 77 Mr Xenos said the Commission would also accept the evidence of Mr Howard which demonstrated that problems had arisen in April 2006 with the applicants not attending for work. In this context, it was a material breach of their contracts to refuse to work on 11 or 12 July until they had achieved a rate increase. Nevertheless, Mr Xenos conceded that, in hindsight, a greater amount of warning of non-performance should have been given. 78 Mr Xenos submitted that it was one thing for the Commission to be asked to prefer the evidence of one witness over another, and quite another matter to suggest, as Mr Aird did, that Mr Brcic had misled the Commission. 79 Mr Xenos agreed that the contract was not an ideal one in that it did not comply with the Transport Industry - General Carriers Contract Determination (357 IG 627) in respect to a "rise and fall" formula or with a provision for resolving disputes. Mr Xenos made an offer, on instructions, that if the applicants could demonstrate, by reference to their running sheets, that they had been underpaid, then the Company would honour any shortfall. 80 Mr Xenos said that Mr Brcic had not offered a 10% increase on 11 July because he simply was not in a position to do so. Similarly, Mr Kamper was not in a position to do so because he was no longer associated with the Company. Mr Xenos emphasised that both applicants had numerous absences and they still were able to earn reasonable amounts of income. 81 Mr Xenos submitted that Mr Brcic had been truthful when he pleaded for more time to familiarise himself with the position. In the circumstances, this was an entirely reasonable and plausible request. While Mr Brcic said he was generally familiar with the Contract Determination from his induction, he was honest when he said he was not aware of the details. However, Mr Xenos pointed out that Mr Brcic was not responsible for negotiating either of the applicants' contracts. 82 Mr Xenos submitted that no compensation should be payable in circumstances where the contract provided for instant dismissal The applicants had not offered themselves for work on numerous occasions and Mr Brcic was faced with an unfair ultimatum, that unless he increased their rates, the applicants would not work. In reply 83 Mr Aird accepted Mr Xenos' offer on any claims of underpayment, but requested the Company's records so that a proper assessment could be made. 84 Mr Aird said it was never the position that Mr Brcic simply wanted more time to consider the situation. Mr Kamper had been on his way over to have discussions. Mr Aird said that there was no evidence the applicants had refused work. In fact, the evidence was to the contrary. All their absences were able to be satisfactorily explained and accounted for.

[28]

CONSIDERATION Legislative Provisions 85 These applications are brought pursuant to the provisions of s 314 of the Act, which confer jurisdiction on the Commission in respect to the reinstatement of a contract of carriage. The provisions relevantly provide as follows: 314 Jurisdiction with respect to reinstatement of contracts

[29]

(1) The Commission may, after inquiry, make a contract determination with respect to the reinstatement of a contract of bailment or contract of carriage that has terminated.

[30]

(2) Reinstatement of a contract includes re-engagement under a similar contract.

[31]

(3) A contract determination under this section may be made on such terms and conditions as the Commission thinks fit, including provision for any period after the termination of the contract to be treated as a period of engagement under relevant contracts.

[32]

(4) If the Commission considers that it would be impracticable to make a determination for reinstatement, the Commission may order the bailor to pay to the driver, or the principal contractor to pay to the carrier, an amount of compensation not exceeding the amount of remuneration of the driver or carrier under relevant contracts during the period of 6 months immediately before the termination of the contract.

[33]

(5) When assessing any compensation payable, the Commission is to take into account whether the driver or carrier made a reasonable attempt to find alternative engagements and the remuneration received in alternative engagements, or that would have been payable if the driver or carrier had succeeded in obtaining alternative engagements.

[34]

(6) A contract determination under this section takes effect when it is made, and is not required to have a specified term or to be published on the NSW industrial relations website. 86 It will be readily seen that the above provisions, and particularly ss 314(4) and (5), are akin to the reinstatement provisions for dismissed employees under Pt 6 Ch 2 of the Act; ss 89(5) and (6). It will also be readily apparent that the Commission's jurisdiction under s 314 is predicated simply on the termination of a contract of carriage; unlike the unfair dismissal jurisdiction which requires a positive finding of a dismissal being "harsh, unreasonable or unjust" (s 84). 87 There are few decisions in this area of the Commission's jurisdiction. However, the interpretation of the Commission's powers under s 314 were considered by Peterson J in Cherry v Allied Express Transport. There, his Honour discussed the history of the relevant provisions and an extended extract from his Honour's decision will serve as a useful summary to accompany this decision. At pg 307 to 309 his Honour said: Mr Higgins of counsel for Allied has raised an issue of jurisdiction to the effect that the Commission lacks jurisdiction to order the reinstatement of contract of carriage which has been terminated by the courier. This proposition is largely based not on the language of the Act but its context and its development. Mr Metcalfe on behalf of the TWU and Mr Cherry has submitted that the Commission does have jurisdiction to reinstate a contract of carriage which "has terminated". These words appear in s 314(1) of the Act, the whole of which it is convenient to set out; it is that section which limits the Commission's jurisdiction and power in the circumstances. The section is as follows: "314(1) [Reinstatement where contract terminated] The Commission may, after inquiry, make a contract determination with respect to the reinstatement of a contract of bailment or contract of carriage that has terminated.

[35]

(2) [Re-engagement] Reinstatement of a contract includes re-engagement under a similar contract.

[36]

(3) [Commission decides terms and conditions] A contract determination under this section may be made on such terms and conditions as the Commission thinks fit, including provision for any period after the termination of the contract to be treated as a period of engagement under relevant contracts.

[37]

(4) [Compensation where reinstatement impracticable] If the Commission considers that it would be impracticable to make a determination for reinstatement, the Commission may order the bailor to pay to the driver, or the principal contractor to pay to the carrier, an amount of compensation not exceeding the amount of remuneration of the driver or carrier under relevant contracts during the period of 6 months immediately before the termination of the contract.

[38]

(5) [Assessing compensation] When assessing any compensation payable, the Commission is to take into account whether the driver or carrier made a reasonable attempt to find alternative engagements and the remuneration received in alternative engagements, or that would have been payable if the driver or carrier had succeeded in obtaining alternative engagements.

[39]

(6) [Determination to have immediate effect] A contract determination under this section takes effect when it is made, and is not required to have a specified term or to be published on the Industrial Gazette." It may be immediately observed that the section is not expressed in the same way as s 84 dealing with the reinstatement of employees where a termination by the employer is harsh, unreasonable or unjust. The power to make a contract determination with respect to reinstatement referred to in s 314(1) concerns relevantly, a contract of carriage "that has terminated". This provision is in identical terms to s 680(3) of the Industrial Relations Act 1991 (NSW) which was the subject of consideration by the Full Commission of the former Commission in Deltect International Courier Pty Ltd v Transport Workers Union of Australia (NSW Branch) (1993) 50 IR 341 (Hungerford and Marks JJ, Sheild CC) where the Full Commission made certain observations concerning s 680(3) concerning its ability to support jurisdictionally an order for the payment of an amount of remuneration relevant to the period between the date the contract of carriage was terminated and its reinstatement. While Mr Higgins has submitted that this fact makes the decision of little relevance to the question now before me I consider the observations of the Full Commission both relevant and useful to assist in an understanding of the meaning of the provision. The Full Commission said (at 349): "The first thing to observe about the sub-section is that it enables the Commission to make a contract determination referable to a contract of carriage "that has terminated and to grant relief" with respect to the reinstatement" of that contract. The sub section is thus concerned, in its terms, with relief against contracts which have come to an end for whatever reason, termination by the principal contractor or by the carrier or by the effluxion of time or by operation of law, and where there may or may not be cause for terminating the contract; and the relief provided is a determination with respect to the reinstatement of the contract. In other words, the sub-section is not concerned with the concept of dismissal as in an employment relationship and which is catered for now in Pt. 8 of Ch. 3 of the Act, or previously by s.20A and other relevant provisions in the former Industrial Arbitration Act, where the remedies of reinstatement, re-employment and compensation for lost wages are available. Here, there is the single remedy of a determination with respect to the reinstatement of a contract of carriage between a principal contractor and a carrier..." I find these observations useful as an indication, although in the course of consideration of the different point, of the views of other members of the Commission in relation to the same language. However, I would add the following comments. The use of the words "that has terminated", if looked at in the light of the usual experience where a contract of an ongoing kind is terminated by one party or the other, would seem to, and be intended to, encompass a termination by either party. When the language was used in s 680(3) of the Industrial Relations Act 1991 (NSW) it appeared in the context of a definition of a contract of carriage which appeared to deny the creation of a continuing relationship between a principal and a contract carrier. Section 663(1) defined a contract of carriage as "a contract ... for the transportation of a load ... by means of a motor lorry in the course of a business of transporting loads of that kind by motor lorry ...". The use of the singular "load" and the plural "loads" would suggest that a contract of carriage was perceived to operate only in respect of a particular delivery and that each delivery or load constituted a separate contract of carriage. The ability of the Commission to order reinstatement in that context was the subject of decision by the Full Commission (Fisher P, Peterson J and Connor CC) of the former Commission in Re Transport Industry (General Carriers) Contract Determination - Appeal by Transport Workers Union of Australia, New South Wales (1993) 46 IR 154. The Full Commission there came to the conclusion that to limit the power to reinstate a contract of carriage to the reinstatement of a contract for the cartage of one-only load which would almost certainly have been delivered was an absurdity which could not govern the meaning and effect of the legislation and that the singular "load" in the definition of contract of carriage could be read in the plural by virtue of the effect of s 8(b) of the Interpretation Act 1987 (NSW). In Greyhound Australia Pty Ltd v Transport Workers' Union of Australia (NSW Branch) (1987) 21 IR 388 Sweeney J had held that the Industrial Arbitration Act 1940 (NSW), whilst conferring in express terms in s 91K of that Act a power to make a contract determination with respect to the reinstatement of a contract of bailment lacked that power in relation to a contract of carriage. Shortly after that judgment an amendment Bill to the 1940 Act was presented to Parliament and became law, a result of which was the express power to make a contract determination for the reinstatement of a contract of carriage "that has terminated". In the Second Reading Speeches (recorded in Hansard , New South Wales, 25 November 1987, p 17545) Mr Fahey, then a opposition speaking to the Bill said that the effect of the legislation as it was found by Sweeney J was "contrary to a report which was prepared by the Commission in 1970 dealing with s 88E of the Industrial Arbitration Act ...". The Report to which Mr Fahey was referring contained in par 30.76 a reference to the reinstatement of lorry owner drivers where the Commission in Court Session adopted the view that "there should also be a power equivalent to the reinstatement power in relation to employees" (see 21 IR at 392). In the light of this history, it seems to me appropriate to interpret the power as one which is to be applied, at least if not solely, in circumstances where there has been an "unfair" termination of a contract of carriage. This means that it may be applied in the same circumstances as apply to employees. Here that involves considerations of resignation or constructive dismissal, reinstatement and compensation. (my emphasis) 88 It seems an assailable proposition then that the traditional notions of unfairness in the dismissal of an employee may also be applied to the termination of a contract of carriage by a principal contractor. Such a finding may well result in the reinstatement of the contract, or in the event of the impracticality of reinstatement, orders for compensation to a maximum of six months pre-termination earnings. 89 Applying this approach, it is appropriate to briefly recount the authorities on what constitutes "unfairness" in matters under Pt 6 Ch 2 of the Act. These relate to, and are applicable here, to matters involving both substantive and procedural unfairness. 90 In Byrne v Australian Airlines Limited (1995) 185 CLR 410, the High Court considered the expression "harsh, unreasonable and unjust" - the relevant test in s 84 of the Act. In their joint judgment McHugh and Gummow JJ said at pg 72: ... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. 91 The broader notion of "unfairness" was seen by a Full Bench of the Commission as a shortened form of the expression "harsh, unreasonable or unjust" in Outboard World Pty Limited t/as Budget Waste Control (Sydney) v Muir (1993) 51 IR 167. There the Full Bench said at pg 182: First we deal with the argument for the appellant that the Commission erred by applying the wrong test in connection with the dismissal: 'unfair' rather than 'harsh, unreasonable or unjust' dismissal. We agree with Mr Reitano's submission in this respect that the reference by the Commissioner to "unfairness" did not represent any misunderstanding of the correct test but was merely the use of a shortened form of expression intended to embrace the three relevant words. Whilst we recognise that there may be a natural tendency (recognised in the use even by the advocate for the Company before the Commissioner of the term 'unfair') to use the shortened form, we consider that it is preferable that a member of the Commission utilise the precise words provided by s246, rather than the catch-all heading, particularly when expressing the basis for a finding that a dismissal is within one or more of the heads provided by the section. We take this view because, even though there may be some circularity in the full phrase 'harsh, unreasonable or unjust', we detect scope for variation of meaning which may be critical to the determination of a particular matter and may be obscured by the use of the substitute term "unfair". Different but not wholly dissimilar words, "unfair", "harsh", and "unconscionable", are used in s275, power of the Industrial Court to Declare Certain Contracts Void, of the 1991 Act. In relation to those words, then appearing in s88F of the 1940 Act, the Commission in Court Session ( Perrignon , Cahill and Dey JJ) in A & M Thompson Pty Ltd v Total Australia Ltd [1980] AR (NSW) 399 at 418 Cahill J (delivering a separate judgment) said: The duty of the Commission is to reach a conclusion on the issues of whether the subject transaction is 'unfair', or 'harsh' or 'unconscionable'.

[40]

It has been said that those words are a 'tautological trinity' ( Davis v General Transport Development Pty Ltd ) [1967] AR 371) but we prefer to take the view that there is a perceptible difference between the meaning of the term 'unfair' and that of the terms 'harsh' and 'unconscionable'. What is unfair may not be so unfair as to be 'harsh'. But, whether this view be correct or not, once the transaction is found to be unfair the Commission may proceed to exercise its very wide power.

[41]

In much the same way, we consider that, while strict definitions of 'harsh', 'unreasonable' and 'unjust' may produce a degree of circularity of meaning, turning on the notion of 'fairness', it may be in a given case that a dismissal may be viewed as coming within the ambit of one of the three adjectives but not the others. To avoid the possibility of misunderstanding or error, the tribunal, when making that primary finding, should state explicitly the basis on which it is made. 92 Section 88 of the Act is the source of consideration of matters going to whether a dismissal of an employee was procedurally unfair. It is particularly relevant to the present case before the Commission. The section is expressed as follows: 88 Matters to be considered in determining a claim In determining the applicant's claim, the Commission may, if appropriate, take into account:

[42]

(a) whether a reason for the dismissal was given to the applicant and, if the applicant sought but was refused reinstatement or re-employment with the employer, whether a reason was given for the refusal to reinstate or re-employ, and (b) if any such reason was given - its nature, whether it had a basis in fact, and whether the applicant was given an opportunity to make out a defence or give an explanation for his or her behaviour or to justify his or her reinstatement or re-employment, and (c) whether a warning of unsatisfactory performance was given before the dismissal, and (d) the nature of the duties of the applicant immediately before the dismissal and, if the applicant sought but was refused reinstatement or re-employment, the likely nature of those duties if the applicant were to be reinstated or re-employed, and (e) whether or not the applicant requested reinstatement or re-employment with the employer, and (f) such other matters as the Commission considers relevant. 93 In Buckman and Another v Burdekin Resources NL (1998) 85 IR 415 the Full Bench said at pg 418: Section 88 of the Act contains a number of matters which may, if appropriate, be taken into account in considering whether a dismissal was harsh, unreasonable or unjust. There is, of course, no obligation imposed by the Act upon employers to give an employee a warning prior to effecting a dismissal. However, a failure to give prior or timely warnings is a matter which properly may be taken into account as part of the consideration of general issues of substantive and procedural fairness. 94 It is to be observed, at this point, that the giving of two and three warnings to the applicants, by Mr Brcic, in close succession, falls a long way short of satisfying the onus he had to give such warnings in a proper and timely fashion. I am bound to say that far from providing procedural fairness, it was a clumsy and ill considered attempt to give an impression of doing so. 95 In Humphries v Cootamundra Ex-Services and Citizens Memorial Club Ltd (1993) 128 IR 37 a Full Bench stressed the importance of ensuring that an employee is afforded procedural fairness in the process leading up to a decision to dismiss an employee for serious misconduct. As I presume misconduct was the basis under which Mr Brcic terminated the applicants' contracts in this case, the principle is particularly apposite in these circumstances. At par 118 the Full Bench said: This matter demonstrates the very real problems that may arise where there is a failure to afford procedural fairness. The obligation upon parties to ensure procedural fairness is not a hollow one and must not be construed as having only technical significance. As the circumstances in this case demonstrate and the provisions of s88 of the Act establish, such considerations may have a very real impact on unfair dismissal proceedings and are of significance in identifying whether a termination was harsh, unreasonable or unfair.

[43]

CONCLUSIONS 96 On one view of it, these matters may be determined on the uncontested evidence which I shall refer to shortly. Nevertheless, there was a strong submission made by Mr Aird that Mr Brcic's evidence was generally unreliable and, where his testimony differed from that of the applicants and Mr Waller, it was the later persons whose evidence was to be preferred. In my view, Mr Aird's submission is soundly based. Having observed Mr Brcic giving evidence, I found him to be an overly confident, but less than convincing witness. His argumentative and dismissive demeanour in the witness box was in sharp contrast to the calm, understanding and co-operative words to be found in his affidavit. I am perfectly satisfied that Mr Brcic told Mr Thomlinson he would "make an example of him" and that he and Mr Kamper boldly refused to negotiate with Mr Waller and ordered him from the site. I would also conclude that Mr Waller had never mentioned a picket and Mr Brcic simply made this up to 'colour' his case. 97 Moreover, when Mr Brcic was asked questions which he knew may have been damaging to his case, he said he could not recall. For example, he could not recall if: · he had denied Mr Waller access to the respondent's time and wages records; · Mr Thomlinson had given him a non-threatening letter asking him to review the drivers rates; and · if Mr Kamper had refused Mr Waller's right to represent his members and negotiate with the Company on their behalf. 98 I do not accept Mr Brcic's evidence that he simply wanted more time to consider the situation because he had just commenced working for the Company. Mr Waller's version of events, which I accept, was Mr Kamper was called in and Mr Brcic was waiting for him to arrive before commencing discussions. Of course, Mr Kamper was well aware of the drivers' grievances, having been told of them on earlier occasions. 99 Putting aside Mr Brcic's unreliable evidence, the respondent called no evidence from Mr Kamper to corroborate what Mr Brcic alleged occurred on 11 or 12 July. (I note, at this point, that it is unnecessary to resolve the conflict in evidence over whether the attendance of Mr Waller on site, and the applicants' dismissals, were on 11 or 12 July.) The respondent also was unable to bring testimony from Mr Born as to what representations had been made by him to Mr Thomlinson and Mr Sztajniger before they entered into their contracts of carriage. 100 In both the failure to call Mr Kamper and, notwithstanding Mr Xenos' difficulties in having Mr Born provide a statement, I am persuaded that Jones v Dunkel inferences are available, in that I would conclude that neither Mr Born nor Mr Kamper's evidence would have assisted the respondent's case. 101 That said, in my opinion, it is beyond doubt that the termination of the applicants' contracts were manifestly unfair, both substantively and procedurally. I arrive at this conclusion for the following reasons:

[44]

Even if I accept that the applicants had said that they and the other drivers were on strike until the matter was resolved, such a statement could not possibly form the basis of the almost instantaneous decision to give them letters of warning and letters terminating their contracts. In any event, I accept the applicants' evidence that they merely wished to have the matter resolved.

[45]

I do not accept the evidence of Mr Howard as to the number of absences of both the applicants for these reasons. Firstly, it seems plain enough that Mr Howard was ill disposed to the applicants, as the following references from his diary make clear: 1 June: Mark - Whinging about being out of fuel and looking for fuel card. 8 July: " These are all part of the games we have to constantly play with these f...... dyno subby drivers ".

[46]

12 July: Mark Tomlinson (sic) GONE!!! Mick Sztajniger GONE!!! Secondly, in cross-examination, where the applicants could remember specific absences, for illness or because of no work etc, these reasons were genuine and no fault of theirs. Thirdly, it makes absolutely no sense at all, that if the applicants were bitterly complaining about no work, that they would refuse work over a three month period. In this regard, I accept Mr Sztajniger's evidence that when he was challenged and he asked the allocator for support, Mr Frisca said, " he never knocked back work ".

[47]

Mr Xenos' submission that the applicants had earned close to what Mr Born had represented to them, misses the point. It was not the earnings necessarily which was the problem - it was their increased costs such as rising fuel costs and the withdrawal of the petrol card.

[48]

Neither applicant was given sufficient warning of poor performance arising from non-attendance or refusal to work.

[49]

Neither applicant was given sufficient warning of the termination of their contracts.

[50]

Neither applicant was given any opportunity to properly defend the allegations against them, and even when Mr Sztajniger challenged the allegation that he was unreliable by producing the allocator, who said that " he never knocked back work ", this explanation was completely ignored.

[51]

The said reasons for the termination of the applicants' contracts had no basis in fact.

[52]

The respondent denied the applicants their legitimate and legal right to have their Union involved in negotiating their claims on their behalf.

[53]

The respondent refused to recognise Mr Waller as the applicants' accredited Union representative and refused to meet with him to discuss the applicants' claims.

[54]

The termination of the contracts was not only unfair, but the Company also breached the contract by not observing subclause (b) of Clause 17, which requires five days notice of any rectification to a failure "to observe or comply with any operational procedures or instructions issued by the Company from time to time". It was the respondent's own evidence that it directed the drivers back to work and they failed to comply with such a direction. In my view, the terms of the contract, referred to above, required the Company to give five working days notice of its intention to terminate the Agreement. It did not do so. 102 As I find the termination of the applicants' contracts of carriage unfair, the question then arises as to what relief should be ordered by the Commission. The applicants have not sought reinstatement of their contracts and seek compensation pursuant to s 314(4) of the Act. This section requires a finding of the impracticality of reinstatement. I consider that the reinstatement of the contracts of carriage would be impractical, not only because the relationship between Mr Brcic and the drivers was strained to say the least, but the real impracticality arises in that both applicants have sold their trucks. 103 In the alternative, Mr Aird contended that the termination of the applicants' contracts was at the higher end of a scale of unfairness and the maximum compensation should be ordered. I would agree.

[55]

104 Accordingly, I make the following orders pursuant to s 314 of the Industrial Relations Act 1996, that:

[56]

The respondent, Smartskip Pty Ltd, shall pay to the applicant, TWS NSW Pty Ltd, an amount of remuneration equivalent to the amount the applicant earned in the six months prior to 11 July 2006.

[57]

The respondent, Smartskip Pty Ltd, shall pay to the applicant, Ready Transport, an amount of remuneration equivalent to the amount the applicant earned in the six months prior to 11 July 2006.

[58]

The amounts so ordered shall be payable within 28 days of today.

[59]

Any disagreement as to the calculation of the earnings in these orders shall be referred to the Commission for final determination. Liberty to apply is available in those circumstances.

[60]

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.

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