K-Dan Pty Limited v. Downer EDI Works Pty Limited [2009] NSWIRComm 1061

Cherry v. Allied Express Transport (1997) 73 IR 305 Corbeski v. BlueScope Steel (AIS) Pty Limited [2006] NSWIRComm 1170 D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 CASES CITED: Gaddes v. Mills Transport - unreported Henderson v. Rural Lands Protection Board (1997) 74 IR 142 Mifsud v. Department of Education and Training [2001] NSWIRComm 1047 Todd v. Mainfreight Distribution Pty Limited - unreported Transport Industry (General Carriers) Contract Determination Case (1993) 46 IR 154

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 On Friday, 24 April, 2009 I handed down my decision on an application made by the Transport Workers' Union of New South Wales under Part 4, Dispute Resolution, of Chapter 6, Public Vehicles and Carriers [S.314], of the 1996 Industrial Relations Act. The application sought the reinstatement of the contract of carriage between Mr Brendon Small, who trades as K-Dan Pty Limited, with Downer EDI Works Pty Limited. Corporate entities of that nature are contemplated by S.309(1)(c). Mr Small's business involved transporting bitumen products on behalf of Downer EDI. He owns a 1989 Ford Loisville LTS model prime mover and Downer EDI owns the tanker which is attached to the prime mover. On Friday, 27 June, 2008 Mr Small was involved in a motor accident and the tanker was damaged in the process. Downer EDI refused to subsequently allocate work to him (although it was prepared for another driver to be engaged by Mr Small in his place - an arrangement which Mr Small was not prepared to accept).

"....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... 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..."

I ordered the reinstatement of Mr Small's contract of carriage with Downer EDI effective from Friday, 24 April, 2009, expressing the following view (at p.22):

"...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..."

"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 contract to be treated as a period of engagement under relevant contracts."

There was, in my opinion, insufficient evidence before me in the hearing to make any proper assessment of any compensation for loss of earnings for Mr Small from the termination of his employment to the date of the reinstatement of his contract of carriage with Downer EDI, as S.314(3) authorises. I directed the parties into further discussions concerning the question of compensation but reserved to the TWU the right to seek the re-listing of this matter for further arbitration, if that became necessary.

4 The need for that arbitration has now arisen. I set the matter down for a hearing on Wednesday, 2 September, 2009. Mr Fagir represented Mr Small and the TWU in the hearing. A statement prepared by Mr Greg Selig, a TWU organiser, was admitted into evidence without the need for Mr Selig to be cross-examined. Mr Salmon represented Downer EDI in the hearing. Mr Stuart Billing, a manager of Downer EDI (road surfacing operations, procurement, manufacturing, sale and delivery of bitminous products) provided a statement and gave brief evidence under oath with respect to it.

5 Mr Selig's statement, accompanied by the bank records of K-Dan establishes a weekly average remuneration of $4,452.43 for it based on the six month period from Tuesday, 1 January, 2008 to Monday, 30 June, 2008. The TWU has used that period as a suitable guide to Mr Small's activities for a comparable period of time. Based on that calculation, and accepting some discounting attributable for running costs for Mr Small's prime mover (28.53%), Mr Fagir has sought compensation of $146,827.00 to Mr Small. But, of course, there can be no guarantee, particularly in the current uncertain economic climate, that the same level of work would have been available to Mr Small over the relevant period. 6 By comparison, based on Mr Billing's calculations, Mr Salmon has estimated K-Dan's loss of income for the period between the date of the termination of Mr Small's contract of carriage with Downer EDI to its restoration - Friday, 27 June, 2008 to Wednesday, 27 May, 2009 - at $79,795.53. Mr Billing had produced into evidence a spreadsheet which outlined the work performed by the other four Downer EDI contract drivers in the past and over the period that Mr Small was not allocated work by Downer EDI and his calculations of Mr Small's work over the period in question was determined in that way. Mr Salmon conceded that there was still a certain amount of speculation in Mr Billing's costing. It was based on the fact that the work which would otherwise have been provided Mr Small was, in fact, shared by the other contract drivers but as Mr Fagir submitted, there was evidence given in the initial hearing of the matter that with Mr Small's tanker out of service, Downer EDI had, in fact, lost business - estimated at $119,950.00 - see p.15 of my decision of Friday, 24 April, 2009.

7 As I indicated in that decision, the structure of Chapter 6 follows closely the scheme of Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] for claims of the unfair dismissal of employees [the Transport Industry (General Carriers) Contract Determination Case (1993) 46 IR 154 and Cherry v. Allied Express Transport (1997) 73 IR 305 at p.309]. And, in my view, the remedies available to contract drivers under Chapter 6 mirror those for unfairly dismissed employees in Part 6. Consequently, the precedents concerning the issue of remuneration for unfairly dismissed employees are equally relevant in these proceedings.

8 There are a number of factors not strictly referred to by Mr Fagir or Mr Salmon, which I believe are relevant for my consideration in this hearing. Firstly, I note in that respect that in assessing the level of compensation under S.314(3) - or S.314(4) dealing with compensation as an alternative to the reinstatement of a contract of carriage - 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 S.314(5) has its counterpart for unfairly dismissed employees in S.89(6) which reads as follows:

"When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration received in alternative employment, or that would have been payable if the applicant had succeeded in obtaining alternative employment."

And in determining whether, in terms of S.314(5), a contract driver made a "...reasonable attempt to find alternative engagements...", the age of the driver, the availability of the type of work in which he was ordinarily engaged and the state of the transport industry generally are matters to bear in mind.

10 Monetary compensation under S.314(5) - like S.89(6) - is not damages. S.314(5) speaks of "remuneration", meaning actual earnings, and it concerns loss of income. I note the comments of McKenna C with respect to 89(6) in Henderson v. Rural Lands Protection Board (1997) 74 IR 142 at p.150, when she indicated that the purpose of monetary compensation in Part 6 proceedings:

"…is not to enrich an applicant nor to punish a respondent. Rather, as the remedy indicates, the purpose of the remedy of compensation is to compensate for losses occasioned by a harsh, unreasonable or unjust dismissal..."

11 But in assessing the amount of compensation for loss of earnings by a dismissed employee (and, in my view, a contract driver), it is not uncommon to bear in mind if the dismissed employee was still guilty of misconduct, albeit not to the level which justified dismissal. For instance, in my unreported decision of Thursday, 21 December, 2006 in Corbeski v. BlueScope Steel (AIS) Pty Limited [Matter No.IRC 2909 of 2006] - concerning the dismissal of a crane driver who had aggressively moved the tongs of a large crane in the direction of another employee with whom he was having an argument - whilst I was prepared to reinstate the crane driver, I rejected (at p.19) any monetary compensation for him during the period of his dismissal to the date of his reinstatement because I had formed the view that he was "...far from blameless over this incident...". Mr Small was responsible for the accident which prompted Downer EDI to effectively terminate his contract.

12 Also in my unreported decision of Wednesday, 25 July, 2001 in Mifsud v. Department of Education and Training [Matter No. 6992 of 1999] I commented (at p.62) that:

"...it would be appropriate when considering the level of remuneration under S.89(3) for an unfairly dismissed employee that I bear in mind any sums earned by him post dismissal…"

That is what is contemplated in S.314(5). In my decision of Friday, 24 April, 2009 I commented (at p.14) on the evidence before me of the work which Mr Small has obtained since the termination of his contract of carriage with Downer EDI to the date he gave evidence in the hearing (but not the date of my ultimate decision on the matter), viz:

"...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)..."

13 But as far as the assessment of monetary compensation is concerned, as Mr Salmon indicated in his submissions, there still remains a certain amount of speculation. Particularly in the current uncertain industrial climate, the amount of work that would actually have been given to Mr Small is uncertain. I indicated as follows in my unreported decision of Wednesday, 23 May, 2001 in Todd v. Mainfreight Distribution Pty Limited [Matters No. IRC 5572 and 5708 of 2002 at p.30]:

"…It seems to me that a certain level of speculation is still suggested by the wording of S.89(6) itself - '…whether the applicant made a reasonable attempt to find alternative employment and the remuneration received in alternative employment, or that would have been payable if the applicant had succeeded in obtaining alternative employment …'. The...words (emphasised) suggests to me that members of the Commission are not constrained to concrete facts alone but must make an assessment catering for a range of possibilities..."

14 That type of approach has been confirmed by the Full Bench (Wright J - President, Walton J - Vice President and Tabbaa C) in D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 when (at p.363) it said that:

"…the power in the Commission to make a money order, subject to the limitation on the quantum of compensation and the matters required to be taken into account by S.89(6), is nevertheless within the Commission's discretion. Whilst the Commission is required to take into consideration the matters identified in S.89(6), those matters are not necessarily to be reflected in any particular, arithmetic or definitive way in the money order for compensation made…" Also, as far as Chapter 6 is concerned, I indicated in my unreported decision of Monday, 28 June, 1999 in Gaddes v. Mills Transport [Matter No.IRC 45 of 1999 at p.20]:

"…I take the view that it is wrong to regard S.314(5) - or S.89(6) for unfairly dismissed employees on which it was obviously modelled - as just a mathematical formula: a sum representing the amount of income over the six months prior to the termination of the contract minus a sum representing the income after that date equals the amount of compensation available. I am directed by S.314(5) to '…take into account…' those factors: what I actually do with that information is still a matter for my discretion…"

15 There has also been some unnecessary delays with this matter proceeding to finality. Mr Small was not allocated work by Downer EDI from Friday, 27 June, 2008 when his contract of carriage with it was effectively terminated, to Wednesday, 27 May, 2009 when he recommenced work with it. The TWU lodged its application for relief for Mr Small on Monday, 1 September, 2008 (because of uncertainty by that time concerning Mr Small's actual status) and there was some further delay in the matter proceeding to arbitration before me which I commented on in my decision of Friday, 24 April, 2009 (at p.2), viz:

"...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.

If the TWU (or Mr Small) had been responsible for any delay in this matter, in my opinion, it would not be appropriate to include the period of delay in any calculations of Mr Small's entitlements to compensation - but I am satisfied that has not been the case. 16 There are therefore a number of factors which I believe I should bear in mind when assessing the level of monetary compensation for Mr Small for the period from the effective termination of his contract of carriage with Downer EDI to when work was again reallocated to him. I highlight the following issues specifically:

• the delay - initially by the TWU but subsequently by Downer EDI - in this matter proceeding to arbitration: the outcome, of course, means that the relevant period when Mr Small was not being allocated work by Downer EDI was greater than it necessarily might otherwise have been and the amount of remuneration consequently larger;

• the income which Mr Small earned from his casual work in the intervening period between the termination of his contract of carriage with Downer EDI (Friday, 27 June, 2008) to the date he re-commenced work with it (Wednesday, 27 May, 2009);

• the fact that, notwithstanding my view that the termination of Mr Small's contract of carriage with Downer EDI was unfair, he was nevertheless responsible for the accident which led to the decision of Downer EDI to effectively bring his contract of carriage to a close; and

• the availability of relevant work for Mr Small in the current industrial climate - admittedly a rough estimate on my part at best.

Therefore, having regard to those factors and, in particular, the terms of S.314(5) and the reasoning in D and R Commercial Pty Limited v. Flood, I propose to make the following order:

1. Downer EDI Works Pty Limited shall pay to Mr Brendon Small the sum of $102,500.00 within 21 days.

2. This order shall take effect on and from Thursday, 1 October, 2009.

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.