National Union of Workers v United FM Pty Ltd trading as United KFPW

LEGISLATION CITED: Industrial Relations Act 1996 ss 309, 310 Transport Industry - Redundancy (State) Contract Determination cl 6

CASES CITED: National Union of Workers v United FM Pty Ltd trading as United KFPW [2006] NSWIRComm 1112 United FM Group Pty Ltd t/as United KFPW v National Union of Workers, New South Wales Branch [2006] NSWIRComm 391; (2006) 158 IR 336

HEARING DATES: 18/02/09, 19/02/09, 20/02/09, 06/03/09, 08/04/09, 17/04/09, 08/05/09, 29/05/09

Sigma Pharmaceuticals Pty Ltd Mr M Byrnes, solicitor Clayton Utz LEGAL REPRESENTATIVES: Transport Workers' Union of New South Wales Mr A Hatcher of counsel Mr O Fagir, Legal Officer - TWU

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES McKENNA C

APPLICATION UNDER PAPRAGRAPH 6(iii) OF THE TRANSPORT INDUSTRY - REDUNDANCY (STATE) CONTRACT DETERMINATION Application by Sigma Pharmaceuticals Ltd under paragraph 6(iii) of the Transport Industry - Redundancy (State) Contract Determination

TRANSPORT INDUSTRY - SIGMA PHARMACEUTICALS REDUNDANCY (STATE) CONTRACT DETERMINATION Application by Transport Workers' Union of New South Wales for a new contract determination DECISION [2009] NSWIR Comm 1036

1 The two applications before the Commission concern the redundancy payments, if any, to be made to contract carriers who formerly worked for Sigma Pharmaceuticals Pty Ltd ("Sigma"). Sigma, a pharmaceutical company, engaged the drivers who are the subject of the applications to distribute its products to clients. In October 2007, Sigma informed the drivers their contracts would not be renewed after their expiry on 14 April 2008 (albeit Sigma subsequently extended offers of work to 12 May 2008). The work the drivers had been performing was tendered in January 2008; Blue Circle Transport Pty Ltd ("Blue Circle") was the successful tenderer. From May 2008, Blue Circle engaged all but one of the drivers who formerly worked for Sigma. 2 It is common ground Sigma was a principal contractor within the meaning of s 310 of the Industrial Relations Act 1996 (NSW) ("the Act"). As such, Sigma was bound by the Transport Industry - Redundancy (State) Contract Determination ("the Determination") in relation to the minimum entitlements for those drivers who were made redundant and who properly could be classed as contract carriers within the meaning of s 309 of the Act. 3 It is relevant to reproduce the redundancy clause of the Determination. The following provisions apply in the event of termination by redundancy of a contract carrier: 6. Severance Pay

(i) Where a carrier is to be terminated for reasons arising from changes in production, program, organisation, structure or technology, subject to further order of the Commission, the principal contractor shall pay the carrier the following severance payment in respect of a continuous period of engagement: (a) Years of Engagement Under 45 Years of Age Entitlement

(b) Where the natural person who performs the driving or riding duties pursuant to the contract of carriage between the principal contractor and the carrier (being a person permitted to do so under paragraphs (a), (b) or (c) of section 309(1) of the Industrial Relations Act 1996) is 45 years old or over, the entitlement shall be in accordance with the following scale:

Years of Engagement 45 Years of Age and Over Entitlement

(c) "Weeks pay" means the weekly average gross remuneration the carrier received from the principal contractor for the previous twelve months for work performed by the carrier on behalf of the principal contractor, less the percentage amounts set out in schedule A to this contract determination on account of running costs.

(ii) Incapacity to pay - Subject to an application by the principal contractor and further order of the Commission, a principal contractor may pay a lesser amount (or no amount) of severance pay than that contained in subclause (i) of this clause.

The Commission shall have regard to such financial and other resources of the principal contractor concerned as the Commission thinks relevant, and the probable effect paying the amount of severance pay in subclause (i) of this clause will have on the principal contractor. (iii) Alternative work - Subject to an application by the principal contractor and further order of the Commission, a principal contractor may pay a lesser amount (or no amount) of severance pay than that contained in subclause (i) of this clause if the principal contractor obtains acceptable alternative work for the carrier.

(iv) Severance pay not to be construed as pay in lieu of reasonable notice - The severance pay in subclause (i) of this clause shall not be construed as satisfying, either in whole or in part, the principal contractor's obligation to provide reasonable notice of termination or pay in lieu thereof.

Sigma's application for an order under cl 6(iii) of the Determination

4 In the first-numbered application (IRC08/625), Sigma seeks an order pursuant to cl 6(iii) of the Determination, the effect of which is to relieve it, in part or in whole, of the obligation to make scale redundancy payments to contract carriers on the basis it obtained acceptable alternative work with Blue Circle for the carriers. The order proposed by Sigma is in the following terms: [Sigma] claims an order or orders under subclause 6(iii) of the Transport Industry - Redundancy (State) Contract Determination … that [Sigma] pay a lesser amount of severance pay than that contained in subclause 6(i) of the [Determination] to those contract carriers who the Commission determines are entitled to an amount of severance pay, being an amount of severance pay to be determined on a case by case basis. 5 The following extracts from the grounds and reasons in support of Sigma's application compendiously outlined its view of the basis on which the application under cl 6(iii) of the Determination was pressed:

[Sigma] selected Blue Circle as the successful tenderer because, among other reason, it was willing and able to engage the Carriers to perform the Distribution Services.

[Sigma] proactively negotiated with representatives of Blue Circle in order to procure from Blue Circle offers to engage the Carriers to provide the Distribution Services.

In addition to the steps referred to in paragraph [12] above, [Sigma] negotiated with Blue Circle to procure more beneficial terms and conditions than Blue Circle would otherwise have offered to the Carriers. Blue Circle's agreement to offer the Carriers work on terms which are above current market rates was one of the primary reasons for [Sigma] selecting Blue Circle as the successful tenderer.

On or around 23 April 2008, Blue Circle offered to engage the Carriers to perform the Distribution Services and any other work that Blue Circle may provide to the carriers from time to time.

In all the circumstances, [Sigma] has obtained acceptable alternative work for the carriers in that, among other things: (a) by purpose and effort, [Sigma] has established an opportunity which suits the Carriers and which has crystallised in alternative work for the Carriers of an acceptable kind;

(b) [Sigma] was a strong, moving force towards the creation of the available opportunity referred to in (a); and

(c) [Sigma] was a strong, moving force in causing the alternative work with Blue Circle to become available on acceptable terms.

The orders sought by [Sigma] will promote the public interest by encouraging principal contractors to minimise hardship to contract carriers who have become redundant, by obtaining acceptable alternative work for them. 6 The Transport Workers' Union of New South Wales ("the TWU") opposed Sigma's application seeking an order under cl 6(iii) of the Determination, principally on the basis of the contention Sigma did not obtain for the drivers work with Blue Circle that could be considered to be acceptable alternative work. TWU's application for a new contract determination

7 The TWU not only opposed Sigma's application for an order under cl 6(iii) of the Determination, it sought a discrete new contract determination on behalf of the drivers. In the second-numbered application (IRC08/884), the TWU sought a contract determination in the following terms: TITLE 1. This Determination shall be known as the Transport Industry - Sigma Pharmaceuticals Redundancy (State) Contract Determination .

PARTIES BOUND 2. This contract determination shall apply to Sigma Pharmaceuticals (Australia) Pty Ltd ( Sigma ) and the Transport Workers' Union of NSW ( TWU ) and those carriers who were terminated by Sigma on or around 12 May 2008 ( the Carriers ).

SEVERANCE PAYMENTS 3. Sigma shall pay to the Carriers the full severance payments prescribed by the Transport Industry - Redundancy (State) Contract Determination ( the Redundancy Determination ).

4. In addition to the severance payments prescribed by the Redundancy Determination, Sigma shall pay to the Carriers the amount of one week's pay for each full year of service beyond six years.

5. Each Carrier's weekly pay shall be calculated by reference to the Carrier's weekly average gross remuneration during the twelve month period for 1 October 2006 to 1 October 2007 less the applicable percentage amounts nominated as running costs in Schedule A of the Redundancy Determination.

6. The payments prescribed by the determination have no effect on any claim for compensation in relation to goodwill a Carrier may have against Sigma.

8 Thus, the TWU seeks a new contract determination under which, first, Sigma would be required to pay to the drivers severance payments higher than those otherwise contained in the Determination, namely, an additional amount of one week's pay for each full year of service beyond six years. Second, the proposed contract determination seeks a departure from the usual formula for the calculating severance payments. The Determination specifies the period for calculating severance payments referable to the earnings in the twelve months immediately preceding redundancy, whereas under the TWU's application the payments would be calculated by reference to an earlier period from 1 October 2006 to 1 October 2007. Sigma opposes the TWU's application for a new contract determination.

Consideration - Sigma's application - Obtained acceptable alternative work 9 The scale payments prescribed in the Determination relevantly can be displaced only by an order from the Commission pursuant to an application under cl 6(ii) (Incapacity to pay) or cl 6(iii) (Alternative work) of the Determination. In this case, Sigma contended it charted a course in the tendering process and in the selection of the successful tenderer with a view to obtaining acceptable alternative work for the drivers. I accept the evidence suggested that the preparedness of Blue Circle to engage the drivers was a factor in that company's selection as the successful tenderer. The evidence indicated Sigma had a commercial interest in seeking what was described in evidence as a "conversion" of the drivers to Blue Circle. That is, the evidence made it clear Sigma was keenly interested in having a smooth transition of the drivers from Sigma to Blue Circle, for the reason of minimising disruption to the distribution services provided to its clients. As indicated in the evidence of Marc Buis, National Logistics Manager - Healthcare Division, Sigma, for its own commercial reasons, wanted to persuade the drivers to work for Blue Circle. Blue Circle did not have a pool of its own, existing drivers. Therefore, one of the reasons Blue Circle was selected as the successful tenderer was because it was willing and able to engage the drivers, being an outcome Sigma hoped to achieve.

10 That being said, there was no evidence of documentation whereby Blue Circle was required, as part of being the successful tenderer, to engage the drivers. Indeed, it seems no formal contractual arrangements existed between Sigma and Blue Circle until after the redundancies had been effected. Nonetheless, I would conclude Sigma relevantly endeavoured to obtain alternative work for the drivers - albeit solely or principally against the background of smoothing the transition for its clients by a conversion of existing drivers. Those endeavours resulted in Blue Circle offering engagements to the drivers from May 2008.

11 In United FM Group Pty Ltd t/as United KFPW v National Union of Workers, New South Wales Branch [2006] NSWIRComm 391; (2006) 158 IR 336, the Full Bench considered the operation of an award-based redundancy provision that is relevantly identical in its effect to cl 6(iii) of the Determination. The Full Bench noted at para [71] that the work "obtains" qualifies the words "acceptable alternative employment" or, by analogy in this case, acceptable alternative work. Although Sigma endeavoured to obtain work for the drivers with Blue Circle, Sigma did not, in my view, "cause it to be available on acceptable terms", in the sense discussed by the Full Bench at para [80]. The evidence does not lead me to conclude Sigma established a case to support the making of an order from the Commission under cl 6(iii) of the Determination. If one scratches the veneer of what was contended by Sigma to be acceptable alternative work, it becomes reasonably clear the terms and conditions of engagement with Blue Circle involved some significant industrial detriments for the drivers in comparison with the terms and conditions at Sigma. 12 My reasons for so concluding focus principally on three matters, though not in any particular order of importance. First, the evidence would not lead to a conclusion there was negotiation on guarantees of on-going work with Blue Circle, whereas the work with Sigma carried a reasonable expectation of permanency - at least as that descriptor ordinarily might be understood by contract carriers in the transport industry. For instance, if a driver's contract was to be terminated at Sigma's initiative before the expiry date, Sigma was to pay-out the driver the minimum rate for the duration of the unexpired contractual period. In contrast, the evidence indicated the drivers were to be engaged on a job-by-job basis with Blue Circle, with no guarantee of work. Sigma did not require written terms and conditions as between the drivers and Blue Circle as part of the tendering. The terms and conditions of engagement were entirely matters between Blue Circle and individual drivers and, in practice, seemed on the evidence to be somewhat informal in their application. Moreover, the contract between Sigma and Blue Circle itself was envisaged as being for only two years. 13 Second, Sigma made no arrangements with Blue Circle concerning continuity of service. As such, the drivers, some of whom had quite lengthy service with Sigma, lost the industrial benefits attaching to that service with Sigma upon commencing work with Blue Circle, pertinently service-related entitlements otherwise available under cl 6(i) of the Determination on termination by redundancy. This is not a hypothetical scenario: Blue Circle in fact dispensed with the services of six drivers when these proceedings were afoot. Given the comparatively short time the drivers in question had worked with Blue Circle, they did not have an entitlement under the Determination to any severance payments on termination from Blue Circle. In United FM Group, the Full Bench at para [91] considered the loss of service-related entitlements of this type was relevant in determining whether an employer could be regarded as having been a strong moving force in causing acceptable alternative employment to be made available to the employees in those proceedings. Similar considerations apply here.

14 Third, Sigma relied on evidence it brokered arrangements with Blue Circle to maximise the drivers' rates of remuneration, being rates above the minimum remuneration specified in the relevant contract determination. As the evidence of Mr Buis indicated, Sigma negotiated on the rates with Blue Circle because Sigma wanted to ensure there was "a high percentage of conversion". 15 Absent any other considerations, the evidence about rates might tend to give some support to the proposition Sigma obtained acceptable alternative work for the drivers. As the TWU's submissions noted, however, the Blue Circle terms and conditions concerning remuneration were, properly considered as a whole, substantially inferior to those attaching to the Sigma contracts, e.g., absence of minimum rates/retainers, whereas at Sigma the drivers were guaranteed a minimum daily payment. Similarly, the hourly rate described in Sigma's evidence was to be paid by reference to the time a run notionally would take to perform, rather than the time it actually took to perform - with the result that the true hourly remuneration potentially would be lower than the nominal rate brokered by Sigma, and potentially lower even than the minimum in the general contract determination. The evidence of Grahame Allard, Site Supervisor, indicated Blue Circle does not have the capacity to pay drivers for any time a run may take beyond the notional time, because Blue Circle and Sigma are contractually bound to those notional run-times. If some drivers' earnings have increased with Blue Circle, it is because more work is being performed; but the run review which saw drivers receiving additional work at Blue Circle was a post-termination event rather than something Sigma had brokered with Blue Circle before the redundancies. Mr Buis conceded in cross-examination most drivers were earning less than when they worked for Sigma, even taking into account the fact Saturday work is now being performed as well as weekday work. The drivers' conditions of engagement with Blue Circle involved what Mr A Hatcher of counsel, for the TWU, succinctly described as more work for less money.

16 Significantly, in terms of rates, evidence arising only in cross-examination squarely disclosed the negotiations with Blue Circle involved Sigma-sponsored proposals that would have had the probable financial corollary of driving-down the drivers' rate of remuneration after a "honeymoon" period of one year. Thus, the suggestion Sigma negotiated with Blue Circle to maximise or maintain appropriate rates of remuneration is, put at its lowest, only part of the story, given that such rates would operate only for a limited period. Sigma's financial intentions concerning Blue Circle had the design of, or likely practical effect of, actually reducing the drivers' rates of remuneration after one year, rather than maximising them.

17 Although there were various other matters militating against concluding Sigma obtained acceptable alternative work for the drivers with Blue Circle (including, but not limited to, matters such as loss of assignability of the contract and capacity to engage a relief driver when sick), these three principal bases are, without more, sufficient, in my view, to dismiss the application by Sigma brought under cl 6(iii) of the Determination. In United FM Group, the Full Bench also noted: [92] Whilst an effort was made by the appellant to facilitate the transition of employees into new employment on terms that may have been better than if the employees had been left to their own devices to find employment, the difference, in the final analysis, was marginal and does not justify an exemption, in whole or in part, from the requirement under the award to make severance payments.

It seems to me, similarly, on the facts of this matter, an exemption has not been justified and that any benefit to the drivers was marginal. Sigma did not obtain acceptable alternative work for the drivers within the meaning of cl 6(iii) of the Determination and, so, the application fails.

Consideration - TWU's application for a new contract determination

18 Higher scale of severance payments: The TWU seeks a new contract determination to apply to the drivers and Sigma specifying severance payments higher than the scale in the Determination. The TWU's grounds and reasons in support of the application contended a new contract determination should be made because the Determination specifies only minima, rather than a cap, and because the drivers became redundant as the result of a cost-saving exercise by Sigma. Given that many of the drivers had lengthy periods of service with Sigma then, as a matter of fairness, the redundancy benefits should be commensurate with those extended periods of service. Mr Hatcher also drew attention to the redundancy arrangements that apply to Sigma's employees in support of the application for a new contract determination for the drivers. 19 True it is Sigma's reason for tendering the work was a bald, cost-cutting measure and various drivers had worked for Sigma for periods well-exceeding six years. However, the TWU has not, in my opinion, made out a case as to why these factors, without more, give grounds for departing from the settled terms of the Determination. The Determination is a comparatively new industrial instrument in the transport industry, having been made by Sams DP on 2 August 2007. It seems to me the Determination ordinarily would be appropriate for application in the event of redundancies in the industry, and I accepted the submissions by Mr M Byrnes, solicitor, for Sigma, the Commission should be cautious about stepping outside the comparatively newly-introduced industry standard. I have not been satisfied it would, in all the circumstances, be appropriate to depart from the scale of entitlements in the Determination solely or principally because the redundancies were effected as cost-cutting measures or because there are drivers who had periods of service with Sigma exceeding six years, or both. These factors would be typical of redundancies in very many workplaces within the transport industry and, for that matter, beyond the transport industry. The case advanced by the TWU did not persuade me there were any substantially distinguishing features that would justify taking the drivers' redundancy payments beyond the scale that applies across this industry to contract carriers, even taking into account the evidence as to the redundancy entitlements of Sigma's employees. 20 Adjustment to formula for calculating severance payments. Clause 6(i)(c) of the Determination defines "weeks pay" for the purposes of calculating severance payments as follows: "Weeks pay" means the weekly average gross remuneration the carrier received from the principal contractor for the previous twelve months for work performed by the carrier on behalf of the principal contractor, less the percentage amounts set out in schedule A to this contract determination on account of running costs.

Hence, under the Determination, the payments would be calculated by reference to the drivers' earnings in the twelve months preceding the date of redundancy. The TWU's proposed contract determination seeks a departure from the Determination's method of calculating weekly average gross remuneration, such that the earnings would be calculated by reference to the period 1 October 2006 to 1 October 2007, adjusted for running costs. 21 The TWU contended the time-frame adjustment was appropriate because Sigma effected changes concerning the organisation of the drivers' work which significantly reduced the remuneration they typically earned each week before that reorganisation. In short, Sigma rearranged its distribution operations such that the drivers performed one run per day rather than two and, at the same time, work was then given to external transport providers. The TWU submitted it was important to maintain the integrity of the Determination by discouraging principal contractors from attempting to limit liabilities by engaging in similar arrangements having the effect of depressing earnings prior to an impending redundancy and, as a result, distorting downwards drivers' weekly earnings for the purposes of calculating severance payments. The TWU further contended it was fair and equitable that redundancy payments should reflect the drivers' higher earnings under what hitherto had been the long-standing work patterns, rather than under the pattern of reduced work which came about only during the several months preceding the redundancies and which coincided with notice the contracts would not be renewed.

22 The evidence established, as the TWU contended, the drivers' weekly earnings with Sigma reduced after the run restructure was introduced by Sigma from around October 2007. Against that background, the TWU's case for adjusting the formula was predicated on the contention the proper application of the Determination would visit a financial unfairness on the drivers if the post-restructure earnings were the basis for the severance payment formula, given the fact the drivers' regular earnings reduced in the period from the implementation of the restructure to the date of the redundancies. 23 The evidence of Mr Buis indicated advice about the termination of the contracts and the reduction in runs was communicated to the drivers on the same day. He said Sigma was aware the run reduction would result in reduced incomes for the drivers and the company would have cost-savings. Nonetheless, the evidence indicated the run reductions were introduced by Sigma for legitimate business purposes and that the decision-making was not made locally. The unfortunate financial corollary for the drivers was a reduction in earnings and, collaterally, the amount of the weekly pay for the purposes of cl 6 of the Determination was adversely affected. I appreciate why the drivers and the TWU consider it unfair to base the calculations on a time-frame which included a period of reduced earnings which differed from what had been typical, pre-restructure earnings. In my opinion, however, it generally would not be appropriate for the Commission to make industrial instruments effectively cherry-picking the time-frames for the calculation of severance payments. In this particular case, I have not been satisfied the TWU has established a case for selecting the pre-restructure period of 1 October 2006 to 1 October 2007 for the purposes of calculating the meaning of weekly pay for redundancy payments, in circumstances where the run reduction was effected for apparently legitimate business purposes. 24 If the Commission were to accept the TWU's submission it would be an appropriate exercise of discretion to select a period of time for redundancy calculations which differed from that specified in the Determination, it is not difficult to envisage situations where principal contractors may, in turn, bring applications seeking that the formula be applied to a time when drivers had fewer runs and lower earnings. If a run restructure at Sigma had, by way of hypothetical example, significantly increased drivers' earnings in the several months preceding the redundancies, I would not, had such an application been made by Sigma, make a contract determination with severance payments referable to a pre-restructure period when earnings were ordinarily lower.

25 The grounds and reasons in support of the application for the adjustment to the formula contended, in part, the proposed change was appropriate so as to maintain the integrity of the Determination by discouraging principal contractors from attempting to limit their redundancy liabilities by engaging in "similar arrangements", being arrangements which reduced weekly pay preceding redundancy. If the evidence had indicated, or had led to an available inference, the run restructure was designed by Sigma's management specifically to artificially deflate the drivers' earnings in the lead-up to the redundancies so as to reduce the financial impost of scale severance payments, no doubt different discretionary considerations would arise in relation to the TWU's application. Evidence to that effect, or an available inference, would strongly have favoured the TWU's application. However, the evidence did not lead to such a conclusion; the evidence indicated the reorganisation was part of changes effected by Sigma nationally, rather than being specific to this group of drivers.

26 I turn now to aspects of the evidence involving Bradley Jon Gibson, who formerly was employed by Sigma as a Distribution Centre Manager. Mr Gibson's role in the allocation of Sigma's driving work formed part of the case advanced by the TWU in support of the contention it would be appropriate to depart from the formula for calculating the meaning of weekly pay for the purposes of redundancy payments. In short, the TWU invited the Commission to draw the inference a company named Couriers By Demand Pty Ltd ("CBD") was paying amounts of money to Mr Gibson personally in connection with the referral of Sigma delivery work to CBD. CBD filed a notice of motion in the proceedings to oppose the production of certain financial records involving itself and Mr Gibson, which I dismissed on 8 April 2009. For his part, Mr Gibson failed to attend the Commission to give evidence on 25 May 2009, in circumstances where I earlier adjourned proceedings specifically to allow him the opportunity to obtain his own legal advice given the nature of the matters to be put to him. 27 The TWU invited the Commission to draw the inference CBD had been paying Mr Gibson "secret commissions", as Mr Hatcher characterised matters, to give work to CBD. The evidence leads me to conclude this is a reasonably available inference. In circumstances where it appears reasonable to infer Mr Gibson was directing work to CBD in return for secret commissions, the TWU invited the Commission to conclude: (a) the work Mr Gibson referred to CBD otherwise would have been available to the drivers; and (b) the drivers' earnings were reduced during the relevant period as a result of Mr Gibson's referral of work to CBD, such as to adversely affect the drivers' redundancy payments. The TWU submitted Mr Gibson's redirection of work from the drivers to CBD formed a further basis on which it would be appropriate to depart from the standard formula in the Determination, more particularly in circumstances where most of the work was brought back to the drivers from outside transport providers after Blue Circle assumed the contract. 28 Mr Buis acknowledged a substantial amount of work was removed from the drivers as part of the run reduction and given to two outside courier companies. He explained the reason was that the sales department had "come up with a plan of delivery time" to meet the logistics of deliveries and market requirements, with the result that work was then given to outside companies. In this context, the issues involving Mr Gibson and CBD raise, in my view, difficult discretionary considerations concerning the application brought by the TWU as is concerns the proposed adjustment to the calculation formula. It seems reasonable to expect the earnings of the drivers, either individually or collectively, may have been, at least to some extent, adversely affected by the diversion of work to CBD - when that work otherwise may have been, or would have been, performed by Sigma's own drivers. To that extent, the drivers, either in individual cases or collectively, most likely suffered a financial detriment in terms of weekly earnings. 29 Mr Byrnes submitted Mr Gibson was off on a frolic of his own in relation to CBD. Indeed, it may be inferred that if Mr Gibson was receiving secret commissions to refer work to CBD, Sigma did not know about the payments. Certainly, there was no evidence to suggest otherwise. Mr Hatcher submitted Mr Gibson took advantage of the run restructure to outsource work to a company from which he was receiving secret commissions. If that is the case, Sigma may have an inappropriate windfall benefit from Mr Gibson's covert and otherwise unauthorised conduct, given the impact on the calculation of weekly pay for scale redundancy payments brought about by the diversion of work to CBD. On the other hand, it may be the case, as Mr Byrnes submitted, some or all of the work would, in any event, have been given to outside transport providers following the run reduction, but, if all other things had been equal, the work otherwise would have been given to CBD's business competitors. That is, it may be the case the volume of work given to outside transport providers rather than the drivers would have been no different following the run reduction, but that the CBD's competitors would have had a greater share of it.

30 Although I have drawn the inference invited by the TWU concerning the payment of secret commissions to Mr Gibson, it is difficult to know how much work would have been given to outside companies anyway following the run reduction and how much the drivers' income was adversely affected by the dealings between Mr Gibson and CBD. That is, there is a dearth of evidence as to what impact, either specifically or generally, Mr Gibson's referral of work to CBD had on the drivers' real or potential earnings - albeit it would seem reasonable to expect it may have had at least some deleterious effect. On balance, and not without reservations, I do not consider the formula should be adjusted in the manner proposed by the TWU on the basis of the evidence and inferences in relation to Mr Gibson's involvement with CBD. As it remains a matter of speculation on the evidence what impact Mr Gibson's conduct had on the earnings of the drivers, it is difficult, in any event, to ascertain what adjustment should be made to the severance formula given the legitimate business aspects of the run reduction - if it were the case an adjustment was otherwise appropriate in all the circumstances. 31 If there was evidence Sigma had acted in concert with Mr Gibson to artificially depress the drivers' earning by diverting work to CBD when that work otherwise would have been given to the drivers after the run reduction that, again, would raise different discretionary considerations altogether strongly favouring the TWU's application. But there was no evidence to support such a conclusion.

32 Over objections from the TWU, I received evidence that went to the issue of whether a number of drivers were contract carriers within the meaning of s 309 of the Act. In this respect, Mr Byrnes identified a number of drivers whom, he submitted, were not contract carriers within the meaning of s309 of the Act. If it is the case a driver was not a contract carrier as contemplated in the legislation, redundancy entitlements pursuant to the Determination plainly do not arise. Mr Byrnes also identified a number of drivers whom, he submitted, had not been made redundant because they were short-term drivers whose contracts had concluded simply by effluxion of time - and, as such, the termination of their engagements did not properly attract redundancy entitlements under the Determination.

33 On further consideration of the parties' submissions in the preparation of this decision, I have decided it would not be appropriate to make findings at large, as it were, about whether individual drivers were contract carriers within the meaning of s 309 of the Act or whether the termination of some of the drivers' engagements with Sigma amounted to redundancies. That is, each of the applications before the Commission is concerned with discrete and confined issues. In IRC08/625, the initiating process sought an order under cl 6(iii) of the Determination on the basis Sigma had obtained acceptable alternative work. Within terms, that application is concerned with seeking "an order or orders under cl 6(iii)", albeit Sigma proposed such orders should be determined on a case-by-case basis. To the extent the application proposed a case-by-case approach, that presupposes such an approach to the question of whether Sigma had obtained suitable alternative work for any one or more of the individual drivers, based on the characteristics of the work so obtained. For example, in National Union of Workers v United FM Pty Ltd trading as United KFPW [2006] NSWIRComm 1112, an employer sought an exemption from making redundancy payments to a number of employees on the basis it had obtained suitable alternative employment with a successor employer. The individual circumstances were dealt with on a case-by-case basis, in as much as I concluded the employer had obtained suitable alternative employment for one employee within a group of several employees - such as to ground an order for exemption from payment in relation to her, albeit not the other redundant employees. In this case, I have not been satisfied Sigma established a case it obtained suitable alternative work for any of the drivers as a class, given the characteristics that were common to the alternative work with Blue Circle. There is no cause for any further case-by-case consideration in that respect concerning the suitability of the work for individual drivers. 34 Similarly, in IRC08/884, the initiating process sought a new contract determination in the terms proposed by the TWU concerning improvements to scale redundancy payments and an adjustment to the calculation formula. Had the TWU's application proceeded in its initial form with individual drivers named in a schedule (rather in its more general amended form filed on 16 February 2009), I consider it may have been appropriate or necessary to make findings concerning individual drivers' contested status as contract carriers and whether the termination of their engagements amounted to redundancies. However, given the more general, final form of the TWU's application, I do not consider it would be appropriate, under the umbrella of the application for a general contract determination which did not include a schedule with named individuals, to determine which drivers had contract carrier status or whether the termination of the engagements of shorter-term drivers amounted to redundancies.

35 I do not have, for example, enforcement proceedings before me such as would involve making orders concerning payment of the outstanding severance payments. Nonetheless, I note those drivers who properly can be classed as contract carriers within the meaning of s 309(1) of the Act have an entitlement to the scale of severance payments under the Determination in connection with redundancies that occurred in May 2008. That is, as a consequence of the dismissal of the application in IRC08/625, it follows the redundancy payments otherwise arising under the Determination now need to paid forthwith by Sigma to contract carriers who were made redundant. I do not consider it is open to me to make broader orders concerning who among the drivers should, or should not, be entitled to payments under the Determination, given the only applications properly before the Commission are those specified in IRC08/625 and IRC08/884. 36 If Sigma considers it is entitled to be relieved of obligations to make redundancy payments to certain drivers on the basis of the contention they are not statutorily-defined contract carriers or because the termination of their contractual arrangements with Sigma did not amount to redundancies, and the TWU does not agree with Sigma's assessment thereto concerning any or all of those drivers, it seems to me such matters appropriately need, given the limited parameters of the two specific applications, to be ventilated by way of dedicated proceedings other than, or in addition to, the applications before the Commission in IRC08/625 and IRC08/884. Orders

37 Orders: 1. the application in IRC08/625 is dismissed; 2. the application in IRC08/884 is dismissed. __________________

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