K-Dan Pty Limited v. Downer EDI Works Pty Limited [2009] NSWIRComm 1020

Industrial Relations Commission (NSW)|2009-07-01

CITATION: K-Dan Pty Limited v. Downer EDI Works Pty Limited [2009] NSWIRComm 1020

APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT Downer EDI Works Pty Limited

CATCHWORDS: termination of contract of carriage - transporting bitumen products by road - collision - damage to vehicle - fault found for collision - corporate identity of applicant - jurisdiction for contract determination of reinstatement - reinstatement of contract of carriage ordered - decision reserved on payment for loss of contract of carriage between date of the termination of the contract of carriage to date of reinstatement

LEGISLATION CITED: Industrial Relations Act 1996

Allison v. Bega Valley Council (1995) 63 IR 68 Antonakopolous v. State Bank of New South Wales (1999) 91 IR 385 Burge v. BHP Steel Pty Limited (2001) 105 IR 325 Byrne and Frew v. Australian Airlines Limited (1995) 185 CLR 410 Cevenini v. Bowport Allroads Pty Limited - unreported Cherry v. Allied Express Transport (1997) 73 IR 305 CCH Australia Limited v. Bowen (1998) 79 IR 206 Deltec International Couriers Pty Limited v. Transport Workers' Union of Australia (1993) 50 IR 341 Gilmour v. George Weston Foods - unreported Hollingsworth v. Commissioner of Police No.2 (1999) 88 IR 282 Humphries v. Cootamundra Ex-Services and Citizens Memorial Club Limited (2003) 128 IR 37 Leeds and Northrup Australia Pty Limited v. Hull (1992) 46 IR 11 CASES CITED: Little v. Commissioner of Police (No.2) (2002) 112 IR 212 Metropolitan Meat Industry Board v. Australasian Meat Industry Employees' Union (1973) AR 231 Re Municipal Employees, Greater Newcastle Salaried Division Award (re Doberer) (1949) AR 686 New South Wales Public Service Professional Officers Association v. Forestry Commission of New South Wales (1990) 39 IR 46 Oswald v. New South Wales Police Service (1999) 90 IR 42 Pacific Power v. Crump (1993) 48 IR 296 Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union v. Gartrell White (No.3) (1990) 35 IR 70 Perkins v. Grace Worldwide (Australia) Pty Limited (1997) 72 IR 186 Plummer v. Stannard Brothers Launch Service (2005) 145 IR 111 Scott v. London and Katherine's Docks Company (1865) 3 H & C 596 Terrigal Memorial County Club Limited v. Federated Liquor and Allied Industries Employees' Union of Australia (1992) 46 IR 145 Transport Industry (General Carriers) Contract Determination Case (1993) 46 IR 154 Turner v. First Fleet Logistics - unreported Wang v. Crestell Industries Pty Limited (1997) 73 IR 454

HEARING DATES: 04/03/2009, 05/03/2009 03/04/2009

APPLICANT Oshie Fagir Transport Workers' Union of New South Wales LEGAL REPRESENTATIVES:

RESPONDENT Alistair Salmon Fisher Cartright Berriman Pty Limited

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Application by the Transport Workers' Union of New South Wales under S.314 of the Industrial Relations Act, 1996

1 Mr Brendon Small operates a contract carrier business, trading as K-Dan Pty Limited. He is 65 years of age. For thirty years Mr Small has acted under a contract of carriage - with Downer EDI Works Pty Limited, transporting bitumen products to various locations in the Sydney region and throughout New South Wales. The current contract - the Bitumen Cartage Agreement - was signed by Mr Small in the middle of 2006. K-Dan has two shareholders - Mr Small and his wife, who are the directors of K-Dan. Mr Small's wife performs administrative duties for K-Dan. Mr Small is the only driver for K-Dan which owns one vehicle - a 1989 Ford Louisville LTS model prime mover. The tanker which is attached to Mr Small's vehicle is the property of Downer EDI. Specific tankers are assigned to specific contract drivers by Downer EDI.

2 Mr Small was involved in a motor accident on Friday, 27 June, 2008, causing damage to the tanker attached to his prime mover when it came into contact with a telegraph pole. The outer skin of the tanker had been damaged, the lagging around the inner barrel stripped off and the barrel itself dented. Since the accident Mr Small has had no work allocated to him by Downer EDI which has taken the view that he is a safety risk. Whilst Downer EDI was prepared to continue its contract with K-Dan it was on the basis that Mr Small engage another driver and it was not prepared to offer Mr Small any work. It was Mr Small's claim that he could not afford to engage another driver for his vehicle and, consequently, his contract of carriage was effectively concluded by Downer EDI from Tuesday, 5 August, 2008.

3 Mr Small is a member of the Transport Workers' Union of New South Wales which lodged an application under Part 4, Dispute Resolution, of Chapter 6, Public Vehicles and Carriers [S.314], of the 1996 Industrial Relations Act on his behalf, arguing that the termination of Mr Small's contract with Downer EDI was unfair. The TWU sought the reinstatement of his contract of carriage with compensation for loss of income or, alternatively, monetary compensation in lieu thereof.

4 The matter was allocated to me and I set it down for a preliminary hearing for conciliation and directions on Thursday, 18 September, 2008. There was no appearance by Downer EDI at that time. I adjourned the proceedings until Wednesday, 1 October, 2008 for conference. Again Downer EDI did not appear in the proceedings. I set the matter down for hearing on Thursday, 6 November, 2008, intending to proceed ex parte if that was necessary. However, Downer EDI ultimately did appear in those proceedings, seeking an adjournment of the hearing, which I granted. I arranged a further conference for conciliation on Wednesday, 12 November, 2008. Further conciliation proved unfruitful, however. The matter proceeded to arbitration on Wednesday, 4 March, 2009 and Tuesday, 5 March, 2009. The parties sought some time to read the transcript of the proceedings and I adjourned the proceedings for submissions in the hearing on Friday, 3 April, 2009.

5 Mr Fagir represented Mr Small and the TWU in the hearing, calling Mr Small to give evidence. He also called two TWU organisers as witnesses in the proceedings: Mr Greg Selig and Mr Darren Wait. Mr Salmon represented Downer EDI in the hearing. He called five representatives of Downer EDI as witnesses in the hearing: Mr Jim Dinarkis, general manager of bituminous products, Mr Karl Lodder, a safety environment quality co-ordinator, Mr Glenn Thomson, bitumen transport manager, Mr William Twyman, a maintenance planner, and Mr Donald Graham, transport manager of bituminous products. Mr Salmon also called as a witness in the hearing Mr Frank Cutajar, a manager of Tieman Industries Pty Limited, which is a specialist in the repair of liquid road tankers and which repaired the tanker damaged in Mr Small's accident.

6 My jurisdiction in this hearing arises under S.314(1), viz:

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

In terms of S.314(2) reinstatement extends to include "…re-engagement under a similar contract…" and in terms of S.314(3) the reinstatement:

"...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..."

7 Under Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] a member of the Commission hearing any claim for the reinstatement of an employee, by virtue of S.89(3), may also consider whether or not to reimburse the applicant for the period of time between the date of the termination of employment and the date of reinstatement [Re Municipal Employees, Greater Newcastle Salaried Division Award (re Doberer) (1949) AR 686 and Terrigal Memorial County Club Limited v. Federated Liquor and Allied Industries Employees' Union of Australia (1992) 46 IR 145]. S.314(3) addresses that issue for contract drivers when it authorises a contract determination of reinstatement to include "...provision for any period after the termination of the contract to be treated as a period under relevant contracts...". In any event, the notion of reinstatement, in the appropriate case, has always comprehended some form of payment for the period after the termination of the contract and its reinstatement. In Deltec International Couriers Pty Limited v. Transport Workers' Union of Australia (1993) 50 IR 341 the Full Bench of the Commission (Hungerford and Marks JJ and Sheils CC) concluded (at p.356) that:

"....the concept of reinstatement..., in itself, is sufficiently wide to comprehend the power for a determination to be made for the reinstatement of a contract of carriage and, as including compensation for loss of income during the reinstated period, retrospective to a date not before the date of termination of the contract. Alternatively, a determination may be made with respect to a reinstatement effected from a future date for compensation for loss of income retrospective to a date not before the date of termination of the contract..."

8 There is also the alterative remedy of monetary compensation in S.314(4) which reads as follows:

"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 the relevant contracts during the period of six months immediately before the termination of the contract."

In assessing the level of compensation under S.314(4) I am directed by S.314(5) 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…"

9 In other words, the structure of Chapter 6 in that respect follows closely the scheme of Part 6 for claims of the unfair dismissal of employees [the Transport Industry (General Carriers) Contract Determination Case (1993) 46 IR 154]. And in Cherry v. Allied Express Transport (1997) 73 IR 305 Peterson J commented on Chapter 6, confirming the view (at p.309) that:

"…it seems to me to be appropriate to interpret the power as one which is to be applied in the same circumstances as apply to employees…"

Therefore, following the same course as the remedy of reinstatement for dismissed employees in Part 6, reinstatement or re-engagement remain the primary remedies over monetary compensation [ Leeds and Northrup Australia Pty Limited v. Hull (1992) 46 IR 11 at p.15]. The preference that the Commission has for reinstatement or re-employment for unfairly dismissed employees over monetary compensation has been confirmed on numerous occasions [ Hollingsworth v. Commissioner of Police No.2 (1999) 88 IR 282 at pp.341 and 342, CCH Australia Limited v. Bowen (1998) 79 IR 206 at pp.217 and 218 and Oswald v. New South Wales Police Service (1999) 90 IR 42 at pp.67 and 68]. For instance, in Plummer v. Stannard Brothers Launch Service (2005) 145 IR 111 the Full Bench of the Commission (Wright J - President, Boland J and Stanton C) stated (at p.115):

"...Reinstatement is the primary remedy under S.89 of the Act: Burge v. BHP Steel Pty Limited (2001) 105 IR 325; Little v. Commissioner of Police (No.2) (2002) 112 IR 212; Humphries v. Cootamundra Ex-Services and Citizens Memorial Club Limited (2003) 128 IR 37. Other remedies may only be ordered if reinstatement is considered to be impracticable. That requires the member of the Commission, in all cases where relief is to be ordered, to give active consideration to the practicability of reinstatement. Indeed, we consider S.89(5) requires the appellant prior to making an order for compensation and in the process of making that finding to give reasons: Entertainment Distributors Company Pty Limited v. Burnard (1993) 49 IR 446 at p.453..."

In my opinion, those comments are equally applicable for contract drivers seeking a remedy for the unfair termination of their contracts of carriage under Chapter 6.

10 According to Mr Small, he has a relatively unblemished driving record. He has held a driver's licence since 1960. His driving record includes two traffic infringements when he was driving a motor car - not the prime mover he used in his work for Downer EDI. One infringement occurred in the middle of 1980 (exceeding the speed limit by not more than 15kms per hour) and the other infringement occurred in the middle of 1983 (not making a turn safely). That is hardly an example of Mr Small's negligent driving - and they occurred over 25 years ago.

11 However, there is a more recent incident involving Mr Small and the vehicle he drives as part of his contract with Downer EDI. The incident occurred on Wednesday, 23 April, 2008. At that time Mr Small was travelling, with a load of 18,000 litres of liquid bitumen, along a narrow, winding dirt road connecting Araluen with Moruya. Mr Small attempted to turn the vehicle but the rear axle on the tanker left the roadway and started to slide down a steep embankment at which point Mr Small applied the brakes and stopped the tanker sliding further. Mr Small claimed he was given incorrect delivery instructions by Downer EDI to drive along that dirt road. When he discovered that he was travelling down the wrong dirt road, he continued to drive down the road, looking for a place to turn the vehicle. But the place he chose to turn the vehicle was apparently a poor choice and he received a caution for negligent driving by police.

12 On Thursday, 8 May, 2008 Mr Lodder also prepared an incident report with respect to what he categorized as a "near miss". Mr Small had unloaded bitumen and left the premises with the bitumen hose connected at the fill point of the silo at the asphalt plant of Downer EDI. According to Mr Lodder, there was a potential for injury if heated bitumen leaked from the hose and Mr Small was counselled over the incident. It is Mr Small's claim that it was formerly common for contract drivers to leave the hose attached to the fill point on the silo. He does not consider that there was any safety risk by his conduct. Mr Lodder's incident report proposed that standards for this practice be reviewed and work rules be enforced in future but it appears that no further action was necessary against Mr Small (or any other contract driver) and none was taken.

13 I now turn to consider the circumstances under which Downer EDI terminated Mr Small's engagement with it. On Friday, 27 June, 2008 Mr Small was driving his vehicle and trailer fully loaded in Rosehill. He had turned into Grand Avenue from Durham Street, close to the asphalt plant of Downer EDI. There is a stop sign at that intersection. Mr Small would have been required to stop at Durham Street and then turn into Grand Avenue. But both Mr Graham and Mr Twyman are of the view that Mr Small was speeding at the intersection and he negotiated the corner too fast, something which presumably he would have only been able to do if he had not first stopped at the stop sign. Mr Small denies that he was speeding. He claims that he stopped at the stop sign first.

14 In a written statement which accompanied Mr Small's evidence in the hearing, he described the motor accident in which he was involved on Friday, 27 June, 2008, viz:

"....I was involved in an incident which resulted in the trailer being damaged as a result of it coming into contact with a telegraph pole on the corner of Durham Street and Grand Avenue, Rosehill. This happened whilst I was turning left from Durham Street into Grand Avenue. A component on the trailer's suspension had broken, which I was unaware of at the time. This caused the trailer to crab sideways and therefore corner differently than what it normally would. The result of this was it scaped the side of the pole as I turned left. No one was injured as a result of this incident. The only damage was to the trailer.

I did not discover the damage immediately as it was dark at the time and I had been travelling at slow speed. I discovered the damage whilst I was unloading at my destination which was only approximately 300 metres from where the incident happened..."

The damage to the tanker extended beyond the outer skin of the tanker to the barrel itself which is dented. Mr Fagir speculated in his submissions that because of rust around the area of the dent on the barrel, it may have been damaged prior to the incident. But I believe that it is logical to assume that the damage to the barrel occurred with the accident to the outer skin on Friday, 27 June, 2008. The dent in the barrel is in a place where the outer skin has also been damaged. 15 In fact, the damage to the tanker was substantial, in my opinion. Mr Cutajar estimated that the cost of repairs to the tanker was $29,355.00. That cost was met by Mr Small's insurer, however. Nevertheless, the tanker was off the road for three months whilst it was under repair and Mr Dinarkis has estimated that the consequential loss of revenue from the loss of work as a result of the damaged tanker was of the order of $119,950.00.

16 Mr Twyman disputes Mr Small's version of the incident. He investigated the incident and his evidence, contained in his written statement was as follows:

"....I briefly inspected the damage done to the tanker before travelling to the scene of the incident. At the scene I took photographs of the roadway, including the telegraph pole which the tanker had hit (being the second pole the tanker passed during its turn) and other features I thought relevant to investigating what had occurred. The telegraph pole appeared to have moved about 50 millimetres in the ground as a result of the impact. There were straight tyre tracks in the dirt alongside the telegraph pole but no scuffing was visible. Nor were there any tyre marks on the section of roadway around it.

After returning to the Rosehill site, I inspected the tanker more closely and noted that the impact with the telegraph pole had torn away the lagging on the outside of the tanker and left a dent in the bitumen barrel which was deep but had some length to it as well. I also noticed that in the dented area, fragments and splinters of timber of the same colour and type as the telegraph pole had been left pressed into the metal of the barrel and were still stuck fairly firmly onto it..."

17 It is Mr Twyman's assessment of the situation that:

"...Mr Small's description of the accident on Friday, 27 June, 2008 is inconsistent with my observation of the scene of the incident and the damage done to the tanker. It appears to me, given the amount of damage done to the tanker that the accident on Friday, 27 June, 2008 was caused when Mr Small cut the corner in question at speed, ripping the lagging around the barrel and denting the barrel significantly and, as a result of colliding with the tanker just in front of the first axle, breaking the bracket holding the axle to the tanker's radius rod, a breakage which would have taken a tremendous amount of force to cause. The radius rod, also known as a tie rod, is an arm that keeps a trailer's axle straight and in place..'

It is highly improbable that the tanker crabbed sideways while Mr Small turned the corner, given that the tyre tracks left by the tanker in the dirt alongside the telegraph pole were straight and without scuffing whatsoever. Had the tanker moved sideways over the dirt and into the telegraph pole, the tracks left by its tyres would have looked radically different. Even if the tanker had moved sideways prior to its wheels coming off the road, there would have been evidence of that in the form of tyre marks left by the rubber sliding across the roadway. No such marks were visible at the scene.

It is also very unlikely that the component of the tanker's suspension, ie the bracket holding the axle to the radius rod, was broken prior to the accident as Mr Small has alleged. The component is an absolutely essential piece of the trailer's undercarriage without which the trailer would not track properly behind the prime mover. Consequently, if it had been broken prior to the accident, the tanker would have constantly collided with any adjacent vehicles, traffic or other objects as it travelled passed them through Mr Small's entire journey, not just during one of his last turns.

Drivers of articulated vehicles such as bitumen tankers are acutely sensitive to problems with their trailers and it is not possible that a breakage like this would have gone unnoticed by a driver for any length of time. In any event, Mr Small and all other contract drivers are charged with responsibility for doing daily visual inspections of their trailers..."

18 Mr Graham shares Mr Twyman's view. He recorded in the written statement which formed the basis of his evidence that:

"....firstly, given that Mr Small was hauling a trailer of the size and strength involved and that the trailer was carrying a load of bitumen at the time of the accident, the damage visibly caused to the trailer, namely the destruction of its outer shell and the massive denting of the inner shell at the leading edge of the damaged segment, could only have been generated by the trailer colliding with the telegraph pole at speed, it is not plausible to explain the damage caused as resulting from the impact occurring just as Mr Small was turning his vehicle after taking off from rest at a stop sign.

Secondly, given that the actual denting of the trailer occurred at the leading edge of the damaged segment and that the damage became decreasing severe as it continued down the trailer, it is again inconsistent with Mr Small's version of events, being that the damage was a result of the trailer crabbing sideways and scaping the pole. The actual damage could not have been caused by scraping during a turn, which would ordinarily become worse as the damage continued down the trailer and would certainly not begin with a large dent.

Thirdly, having seen photographs of the scene of the accident, I took particular notice of a photograph of the tyre tracks left by the trailer after it climbed the corner and moved alongside the telegraph pole. Those tyre marks are perfectly straight. They therefore indicate that the trailer did not crab sideways by any amount during the turn..."

19 Mr Dinarkis also commented in the written statement which formed the basis of his evidence that:

"....having been advised of the damage caused to the trailer, Mr Small's description of the accident on Friday, 27 June, 2008 and its aftermath understates the force of the collision between the trailer and the telegraph pole. Accordingly, the reason given for the collision, allegedly faulty suspension, is highly unlikely to have been the cause, or at least the sole cause, of the accident..."

20 When he noticed the damage to the tanker, Mr Small contacted Mr Thompson by telephone (in Brisbane) and informed him what had occurred. It is Mr Thompson whom Mr Small contacts over any operational issues. Mr Thompson asked Mr Small to tow the trailer to the nearby maintenance workshop once he had finished unloading it. The remaining loads allocated to him on that day were reassigned. Mr Small went home and then received a telephone call directing him to attend a meeting on Monday, 30 June, 2008 at the Downer EDI offices at Rosehill.

21 There is some conflict in the evidence concerning that meeting and telephone conversations between Mr Small, Mr Wait and Mr Thomson which followed that meeting. I suspect that most of that conflict is due to no more than faulty recollections by the participants and the different versions advanced by the witnesses does not appear to be over any matters of real substance for my deliberations in this hearing. Nevertheless, I propose to set the evidence out in some detail.

22 Mr Small and his wife arrived at the offices. According to Mr Small, the meeting was delayed for approximately 20 minutes. Mr Lodder asserts that the delay for the meeting would have been no more than 5 minutes. Mr Small was informed by Mr Graham that his wife would not be required to attend the meeting and that the meeting was to be with Mr Lodder alone. According to Mr Small, Mr Graham spoke to his wife and said:

"If you go in there, it may have a different outcome."

Mr Small regarded those cryptic comments as a threat but he chose to attend the meeting alone. Mr Graham denies that he used words to that effect. He claimed that he simply stated that he wanted Mr Small "...to answer his own questions...". Nevertheless, the outcome was the same: Mr Small's wife was excluded from the meeting.

23 At the meeting Mr Lodder said words to the following effect to Mr Small:

"The purpose of this meeting is to investigate the accident that happened on Friday. It is not a witch hunt; we just don't want anything like that happening again."

It was Mr Small's understanding that the meeting was to be one-on-one between him and Mr Lodder but at that point Mr Graham had entered the office and he and Mr Lodder continued to question Mr Small over the accident. It is Mr Lodder's recollection that Mr Graham had informed Mr Small earlier that there would be three persons at the meeting - Mr Small, Mr Graham and Mr Lodder. The meeting concluded and Mr Small and his wife left the site. Nothing had been said at that time over what was to happen next.

24 Mr Small apparently made several unsuccessful attempts to contact Mr Thomson over the telephone. When on Monday, 7 July, 2008 Mr Small finally did contact Mr Thompson, according to Mr Small, he was informed by him:

"You are still employed by the company, but you are stood down until your tank is back on the road."

Mr Thomson denied using the words "stood down". He claimed that he spoke to Mr Small in the following terms:

"When the trailer is back on the road we will look at allocating work to K-Dan."

25 Mr Small asked for a replacement tanker but Mr Thompson informed him that there were no spare tankers available. Mr Small responded:

"That's bullshit! There's two at Rosehill and one at Wetherill Park."

Mr Small claimed that he had obtained that information from other contract drivers who had informed him that there were replacement tankers available. But Mr Thompson asserts that all available tankers were scheduled for repairs and maintenance and he conveyed that information to Mr Small. The conversation did not continue beyond that point.

26 Mr Small claimed that he heard rumours from other owner drivers that his services with Downer EDI had actually been terminated. He sought confirmation of that fact from Mr Thompson. He was unsuccessful in reaching Mr Thompson and he approached Mr Darren Waite, an organiser of the TWU, concerning the matter who was informed that he should contact Mr Dinarkis, who is based in Melbourne. Mr Waite made several unsuccessful attempts to contact Mr Dinarkis. He finally reached him on Wednesday, 30 July, 2008 and Mr Wait recalled Mr Dinarkis saying:

"Mr Small is a safety risk as far as we're concerned and he will not be driving for the company again."

Mr Wait spoke of Mr Small's rights under Chapter 6, viz:

"Are you aware that here in New South Wales there are laws to protect sub-contractors against unfair dismissal and there are also redundancy laws for subbies?"

"I have a responsibility for public safety and I won't sleep at night knowing this guy is on the road."

27 Mr Wait suggested that there be a further telephone hook up in Mr Small's presence and that occurred on Tuesday, 5 August, 2008. Mr Dinarkis confirmed to Mr Small his earlier comment to Mr Wait, viz:

"The situation has not changed. As far as we're concerned K-Dan is still employed but you will have to put a driver in the truck."

Mr Small informed Mr Dinarkis that he could not afford to pay a driver in the truck. Mr Dinarkis informed Mr Small that:

"The decision has been made. There have been too many incidents already."

28 Mr Small continued to argue with Mr Dinarkis, who remained silent for some time but ultimately said:

"I'm not going to argue about this anymore. If you are not prepared to put a driver in the truck, then K-Dan will no longer have a job with us."

"So he's terminated then! I can see this ending up in court."

The telephone conversation ended at that point. Mr Waite telephoned Mr Dinarkis a short time later and asked him for written confirmation of the termination of Mr Small's contract with Downer EDI. Mr Dinarkis agreed to forward a document to that effect but it has not to date been forthcoming.

29 Mr Small recorded in his written statement that:

"....during the last six months my average weekly remuneration was approximately $4,900.00 per week. Since my termination from Downer EDI I have been trying to obtain alternative employment without a great deal of success. It appears to me that my age restricts me from being suitable to most employers. I have recently acquired some casual engagement. This commenced in October and to date has only been two days a week.

I have been suffering financially since I have not been working. I have a mortgage on my home and I have had to cancel my credit card due to my lack of income. This financial hardship is causing me considerable stress due to uncertainty of finding alternative work. I have also had to cash in my superannuation to cover my financial commitments and make my mortgage payments..."

30 In his evidence, Mr Small indicated that since the termination of his contract with Downer EDI he has found some contract driving work - one or two days per week - for which he earned approximately $2,000.00 per week and occasional casual employment (at $150.00 per load). For its part, as I indicated earlier in this decision, whilst the repair of the damage to the tanker was met by Mr Small's insurer, Downer EDI has estimated that it has suffered a loss of $119,950.00 due to the tanker being off the road.

31 It is, of course, quite common for contract drivers to act through a corporate entity and that type of arrangement is contemplated by S.309(1)(c) which extends the operation of Chapter 6, viz:

"....where the carrier is a body corporate - if no person is, except in the prescribed circumstances, employed (whether pursuant to a contract of employment or not and whether by a body corporate or not) in driving or riding on that or any other motor vehicle or bicycle in the course of that business unless the person is:

(i) a director of the body corporate or a member of the family, or

(ii) a person who, together with the member of his or her family, has a controlling interest in the body corporate, or

(iii) a member of the family of a person who, together with the members of his or her family, has a controlling interest in the body corporate..."

32 It is Mr Salmon's argument that the contract under which Mr Small worked for Downer EDI was at all times with K-Dan. That is no doubt the position. He claimed that the contract - the Bitumen Cartage Agreement - contemplated that another driver may be engaged to drive Mr Small's prime mover instead of Mr Small. I do not believe that it is open to argument that the contractual arrangement between K-Dan and Downer EDI has actually come to an end. But Mr Salmon asserted that occurred when Mr Small declined to accept the proposal that he engage another driver, consistent with the contractual arrangements in force. In other words, Mr Small terminated the contract himself.

33 As Mr Fagir highlighted in his submissions, and as I indicated earlier in this decision, my jurisdiction in this hearing arises by virtue of S.314(1), viz:

"The Commission may, after inquiry, make a contract determination with respect to the reinstatement of a...contract of carriage that has terminated ..."

My emphasis. Mr Fagir described the language of S.314(1) as "passive" and, consequently, he claimed that it was still within jurisdiction, in the proper case, for a member of the Commission to provide a remedy to a contract driver, even where the termination of the contract was at the initiative of the contract driver. The words "...that he terminated..." are neutral words and open to the interpretation Mr Fagir has given them. 34 In any event, I believe the situation confronting Mr Small in the circumstances described in this hearing was analogous to the constructive dismissal of an employee who has resigned. As the Full Bench of the Commission (Peterson and Marks JJ and Connor CC) commented in Allison v. Bega Valley Council (1995) 63 IR 68 at p.73:

"…where an employee initiates the termination of the contract of employment, it is necessary to consider whether that ostensible act of termination was given freely and without any undue pressure. If the ostensible resignation is, in effect, a response to and consistent with a desire of the employer that such resignation be forthcoming, then what has occurred may be that the termination has been brought about by the employer and that in this way the employee has been dismissed…"

35 Whether or not the contract under which K-Dan operated for Downer EDI, authorised a replacement driver, the fact remains that for the life of that contract Mr Small was the sole driver of his prime mover. The restriction imposed on Mr Small that he may not drive under his contract of carriage with Downer EDI, which Mr Small rejected, represented such a fundamental change to the arrangements under which he had previously worked for Downer EDI that I believe that, if it did not constitute an actual termination of that contract at the initiative of Downer EDI, it would nevertheless constitute a constructive termination of his contract of engagement by it.

36 But that still leaves in issue the question of whether or not Downer EDI was justified in its decision to place that stipulation that precluded Mr Small driving for it. The dismissal of an employee may be unfair on either substantive or procedural grounds viz:

the reason for the dismissal is improper or unlawful, eg the dismissal arose as a result of the employee making a claim for wages, becoming a member of a trade union or making some complaint against the employee; * the allegation against the dismissed employee is not proven according to the appropriate standard of proof; * having regard to the nature of the incident which gave rise to the dismissal, it was too severe an action for an employer to take; and * the manner in which the dismissal was carried out was unfair in some way - procedural unfairness.

37 Those concepts are equally relevant in Chapter 6 to contract drivers, in my opinion. Mr Fagir has suggested that the termination of Mr Small's contract of carriage with Downer EDI was both substantively unfair (because it was not justified in the first place) and procedurally unfair (because the manner in which it was carried out was also unfair). The procedure under which the termination of an employee is carried out is a factor to take into account in assessing the fairness or unfairness of a dismissal [Byrne and Frew v. Australian Airlines Limited (1995) 185 CLR 410 and Antonakopoulos v. State Bank of New South Wales (1999) 91 IR 385 at p.389]. I import that concept into Chapter 6 for the termination of a contract of carriage.

38 Mr Fagir described the termination of Mr Small's contract of carriage with Downer EDI as a "summary dismissal" and he indicated that the onus rested on Downer EDI to establish that Mr Small was guilty of misconduct justifying the termination of his contract of carriage with it- an onus which it has not discharged in this hearing [Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union v. Gartrell White (No.3) (1990) 35 IR 70 at pp.83 and 84 and Wang v. Crestell Industries Pty Limited (1997) 73 IR 454 at pp.463 and 464]. That issue ultimately turns on the interpretation of the evidence before me in this hearing. 39 It is unclear from that evidence whether Mr Small's travelling at excessive speed when he struck the telegraph pole with his trailer (Mr Twyman's assessment of the situation after he inspected the trailer and the site) or the prior damage to the trailer suspension (Mr Small's claim) was the real cause of the accident on Friday, 27 June, 2008. There was no police investigation of the incident. The telegraph pole had unquestionably moved in the ground but whether that was because Mr Small had scraped by the telegraph pole, as he alleges, or whether the force of the trailer hitting the telegraph pole at speed had moved it in the ground, as Mr Twyman had deduced, is a matter for some speculation at this time.

40 But even accepting Mr Small's evidence that there was prior damage to the trailer suspension, it does not necessary constitute an excuse for Mr Small. The operators manual under which Mr Small works places an obligation on the contract drivers to check their prime mover and tanker for mechanical faults before they take them onto the road. And, in any case, it would obviously be prudent that any driver do so. That would especially be that case with a large tanker loaded with hot bitumen. A casual approach to such a check is totally inappropriate and any faults in the suspension should have shown up in such a check. 41 But, as Mr Twyman and Mr Graham have suggested in their written statements, the photographs supplied to me in the hearing show tyre tracks leading up to the telegraph pole which are not scuffed as they would be if the tanker crabbed sideways as Mr Small is claiming in his evidence. Moreover, Mr Twyman is no doubt correct in the assertion he made in his written statement that if the bracket holding the axle to the radius rod on the tanker had been damaged prior to the incident, Mr Small would have been expected to discover it earlier in his journey on Friday, 27 June, 2008.

42 Mr Salmon is convinced that Mr Small was speeding at the time and had therefore failed to stop at the stop sign. Mr Selig has considerable experience in driving heavy vehicles, prior to his employment as a TWU organiser. He conducted an experiment with Mr Small's prime mover over the relevant part of the route Mr Small had taken on Friday, 27 June, 2008. He claimed in a written statement:

"....Both from observation from the road and from my experience in driving the semi-trailer, it was clear that the corner is a difficult one. The manoeuvre is a difficult one. It involves a sharp left hand turn of less than 90 and then immediately afterwards a right hand u-turn around a traffic island. I found that I consistently had difficulty in placing the vehicle in an appropriate position on the road to complete the left and then the right hand turns.

I noticed that the pole contacted by Mr Small was out of view while I was stopped at the stop line on the corner. At the stop line and through the turn, the pole was obscured by the extended sleeper cab on the prime mover. The pole did come into view at one point on the wide angle mirror but it is difficult to judge distance from these mirrors which are small and produce a distorted field of vision.

I performed the manoeuvre several times in darkness. This significantly increased the difficulty of navigating the vehicle through the two corners. During darkness the pole was invisible throughout the entire manoeuvre... In my view, having performed the manoeuvre several times, there is very little margin for error when turning a semi-trailer left from Durham Street onto Grand Avenue and then immediately doubling back in the opposite direction. Even absent any equipment failure, it would require only a minor error of judgment to contact the telegraph pole in question.

From my observation of the telegraph pole, it appeared to me that Mr Small was not the first nor the last person to have contacted it... The pole is damaged, starting from around an inch from the ground to a height of around eight feet. There are a variety of scrapes and other marks on the pole, some of which appear to be fresher than others. From my observation it appears the pole has been contacted by a variety of vehicles over a period of time..."

"....I stopped at the stop sign each time I rounded the corner. I chose second gear (of 13) and accelerated as fast as I could away from the stop line. I was unable to reach a speed above 15kph on any of my attempts before having to decelerate to commence the right hand u-turn. Even if I had not stopped at the stop sign, it would be necessary to slow to a very slow speed to take the corner. In any scenario, in my view, it would be impossible to take a semi-trailer around the corner at speed. I note that Mr Small's vehicle at the time of the accident weighed 42.5 tonnes and would therefore have accelerated at a considerably slower rate than the 20.5 tonne combination I was driving..."

44 The question of speed is, of course, relative. In view of the conflicting evidence in this hearing, the speed that Mr Small was travelling at the intersection may not ever be determined with any confidence. But presumably, if Mr Small was travelling at high speed, I would have expected a more serious accident, with the tanker turning over in the process. After all, he was driving a large, heavy tanker. Even a modest speed may be too much to negotiate a heavy articulated vehicle at that intersection. It seems to me that, notwithstanding that the incident apparently occurred on a route regularly taken by Mr Small on his way to the Downer EDI asphalt plant, he simply took the corner too sharply and the result was a collision with the telegraph pole. I do not believe that speed was really a factor in the incident. 45 But, in any event, Mr Small was in total control of the situation when the accident occurred - or should have been. The driver of any motor vehicle which collides with a stationary object like a telegraph pole can hardly claim it was not his fault. In my opinion, it is not necessary for Downer EDI to "prove" every ingredient of the incident, as Mr Fagir has proposed in his submissions: the event would speak for itself - res ipsa loquitur [Scott v. London and Katherine's Docks Company (1865) 3 H & C 596]. That was the view I took in my unreported decisions of Wednesday, 13 June, 2001 in Turner v. First Fleet Logistics [Matter No.IRC 5907 of 2000 at p.10] - dealing with a mechanic dismissed for negligence when a sump cap on a vehicle he was servicing was not replaced - and on Thursday, 15 August, 2002 in Cevenini v. Bowport Allroads Pty Limited [Matter No.IRC 35 of 2002 at p.8] - dealing with the driver of a vehicle involved in a road accident. In both cases the dismissed employee was in complete control of the environment in which he worked and any damage to property must therefore have fallen entirely on him. In my opinion, the fact that the tanker was actually the property of Downer EDI does not really alter the situation. That tanker was specifically allocated to Mr Small for his prime mover and, as such, it became his responsibility on the road.

46 Likewise, it is not open to Mr Small to claim that the accident that occurred on Wednesday, 23 April, 2008 when the tanker attached to his prime mover slid down a steep embankment on a narrow winding dirt road was anyone else's fault that his own - for which he received a caution for negligent driving by police. He may have been given the wrong directions but that is not the point. He turned his vehicle at a place where it was not safe for him to do so. He was responsible for the incident. 47 I note that the cost of repairs to the tanker [$29,355.00, according to Mr Cutajar] was met by Mr Small's insurance. Downer EDI has not incurred any costs as a result. And I do not believe that it is appropriate to factor in the loss of revenue to Downer EDI due to the tanker being out of service [$119,950.00, according to Mr Dinarkis]. Mr Fagir suggested in his submissions that for Downer EDI to not have replacement tankers available for occasions when for one reason or another a particular tanker was not in service, eg regular maintenance, was a case of "...poor management...". That may be putting the matter too high but equally that loss should not be sheeted home to Mr Small, in my opinion.

48 I would not wish to detract from the seriousness with which I regard accidents of this type. Mr Small drove a very large articulated vehicle, with a hazardous product - hot bitumen. He obviously must exercise caution when he is driving it. But having particular regard to Mr Small's lengthy and otherwise relatively clean driving record, was there grounds for the termination of Mr Small's contract of carriage by Downer EDI? I do not believe so.

49 It is clearly established that an employer may act unfairly when he dismisses an employee if the offence against the employee is not sufficient to warrant dismissal: that concept appears to be embedded in the words "harsh", "unreasonable" or "unjust" in S.84(1) - particularly the word "harsh": the "punishment" should fit the "crime". The Full Bench of the Commission (Fisher P, Hungerford J and Connor CC) in Pacific Power v. Crump (1993) 48 IR 296 commented in that respect (at p.302) that the test was whether or not:

"…the ultimate sanction of termination of employment was too severe a penalty…"

Even if there are grounds for terminating the contract of employment, it still remains open to the Commission to examine the severity or otherwise of the step of dismissal, having particular regard to the dismissed employee's record of employment. 50 Watson J of the former State Industrial Commission in Metropolitan Meat Industry Board v. Australasian Meat Industry Employees' Union (1973) AR 231 commented (at p.233) that:

"…in some cases, the issue of unfairness has been resolved because of the way in which the employer has exercised his right to dismiss or because of the absence of adequate justification for dismissal. But even if there are grounds for terminating the contract of employment, it is still open to the tribunal to examine the severity or otherwise of the step of dismissal. The Commission, commissioners and committees have so acted in the past and have intervened to order reinstatement where because of mitigating circumstances or past good conduct, termination has been shown to be too harsh a consequence…"

That type of approach is equally applicable, in my view, to the relationship between principal and contract driver in proceedings taken under Chapter 6.

51 In his unreported decision of Thursday, 18 May, 2006 in Gilmour v. George Weston Foods [Matter Nos.IRC 5092 and 6169 of 2005] Cambridge C dealt with a demotion of a truck driver following a motor accident in the truck he was driving - leaving the truck in gear whilst it idled so that it crashed into an awning of a nearby building. Cambridge C described the demotion as a "...punishment without end..." and had this to say (at p.15):

"....In circumstances where an employee has had twenty years of unblemished employment, the applicant has been understandably aggrieved by a punishment that provides no identified prospect of ever finishing. Although the Commission can readily appreciate the concern that the employer would have with the nature of the truck accident incident, a punishment with no perceivable end is, when considered objectively, likely to be harsh... There could be little doubt that the penalty must be held to be harsh in these circumstances. Consequently, a case has been established to require the intervention of the Commission..."

52 As I indicated earlier in this decision, reinstatement in employment remains the primary remedy for an unfairly dismissed employee. I believe the same principles should apply under Chapter 6. Often reinstatement will produce some difficulties and disharmony at the place of work. It is a question of degree whether such difficulties or disharmony reaches the point where reinstatement is impracticable. Embarrassment may not be enough to tip the scales against reinstatement [Perkins v. Grace Worldwide (Australia) Pty Limited (1997) 72 IR 186 at pp.191 and 192].

53 Mr Salmon has nevertheless argued in his submissions that Downer EDI have lost confidence in Mr Small as a contract driver. A question of trust is essential in the relationship between a contract driver and his principal. It is clearly a matter which has to be weighed in the balance in assessing the practicability of reinstatement of the contract of carriage and it is a question of evaluating the situation in a commonsense way. But as the Full Bench of the Federal Court (Wilcox CJ, Marshall and North JJ) stated in Perkins v. Grace Worldwide (Australia) Pty Limited (at p.191):

"…If the court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the court carefully scrutinize any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee…"

54 And as Cahill J - Vice President of the former Commission said in New South Wales Public Service Professional Officers Association v. Forestry Commission of New South Wales (1990) 39 IR 46 (at p.50):

"...industrial tribunals should examine with some rigour, and should not too readily accept, claims made on behalf of an employer who has been found to have treated an employee unfairly in the manner of termination of employment that there would be '...practical uselessness...' in attempting to re-establish the previous employment relationship...."

I see no reason why Mr Small should not return to work for Downer EDI, as he has done for a lengthy period of time already. The relationship between a contract driver and his principal is considerably more remote than most employment situations. The contract driver is allocated particular work and performs that work away from the principal's place of work. He does not fall under direct supervision.

55 In those circumstances, I propose to make a contract determination for the reinstatement of Mr Small to the position of contract driver for Downer EDI effective from Friday, 24 April, 2009. I believe that there is insufficient evidence before me to date in this hearing to make any proper assessment of compensation for loss of earnings for Mr Small, if any, since the termination of his employment and I reserve the position of the TWU with respect to that matter. I direct the TWU and Downer EDI into further discussions concerning the question of compensation and will reconvene these proceedings for mention and further programming on Tuesday, 9 June, 2009.

Cutajar, Frank Manager, Tieman Industries Pty Limited Dinakis, Jim General Manager of Bitumous Products Graham, Donald Transport Manager of Bitumous Products Lodder, Karl Safety Environment Quality Co-ordinator of Bitumous Products Selig, Greg TWU organiser Small, Brendon applicant Thomson, Glen Bitumen Transport Manager Twyman, William Maintenance Planner Wait, Darren TWU organiser

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