Transport Industry (State) Award - Application by Transport Workers' Union of Australia, New South Wales Branch for a new award; Application by Employers' Federation of New South Wales for variation of award. [2000] NSWIRComm 42 - NSWIRComm 1996 case summary — Zoe

NSWNSWIRComm

Transport Industry (State) Award - Application by Transport Workers' Union of Australia, New South Wales Branch for a new award; Application by Employers' Federation of New South Wales for variation of award. [2000] NSWIRComm 42

[2000] NSWIRComm 42

Industrial Relations Commission (NSW)|1996-12-20|Before: Wright J, Peterson J, Ms J

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At a glance

Source facts

Court

Industrial Relations Commission (NSW)

Decision date

1996-12-20

Before

Wright J, Peterson J, Ms J

Catchwords

02/02/2000
02/03/2000
02/04/2000
02/28/2000

Source

Original judgment source is linked above.

Catchwords

02/02/200002/03/200002/04/200002/28/200003/01/200003/02/2000 DATE OF JUDGMENT: 03/31/2000

Judgment (49 paragraphs)

[1]

CITATION : Transport Industry (State) Award - Application by Transport Workers' Union of Australia, New South Wales Branch for a new award; Application by Employers' Federation of New South Wales for variation of award. [2000] NSWIRComm 42 Transport Workers' Union of Australia, New South Wales Branch New South Wales Road Transport Association Inc PARTIES : Employers' Federation of New South Wales Australian Business Industrial Australian Industry Group Labor Council of New South Wales FILE NUMBER: IRC6475 of 1998 CORAM: Wright J President; Peterson J; Connor C CATCHWORDS : Award - Application for new Award - Special Case - Wage Fixing Principles - Wage increases consented to by majority parties - Effect of agreement between parties. State Wage Case August 1997 (1997) 73 IR 200 State Wage Case June 1998 (1998) 79 IR 416 CASES CITED : State Wage Case June 1999 (1999) 88 IR 363 Re Transport Industry (State) Award (unreported, Full Bench, IRC96/5261, 20 December 1996) Re Carpenters and Joiners and Bricklayers, Construction Award [1968] AR (NSW) 32 HEARING DATES: 02/01/2000; 02/02/2000; 02/03/2000; 02/04/2000; 02/28/2000; 03/01/2000; 03/02/2000 DATE OF JUDGMENT: 03/31/2000

[22]

The Evidence 13 In granting leave to amend the application in conformity with the agreement reached on the third day of the proceedings, a procedure was adopted which would permit supplementary evidence to be adduced by the RTA and to afford the other parties an adequate opportunity to ensure they were in a position to test that material by cross-examination. 14 The evidence in the proceedings may be summarised as follows: Wayne John Forno has been an organiser with the TWU since 1994 and is the acting sub-branch Secretary for the Sydney and Central Sub-branch of the TWU. His evidence related some of the history of award regulation in this industry and the way in which the award had played a central role in providing wage rates in a context of little or no over award payments. He dealt with the difficulties in the industry associated with the introduction of enterprise bargaining by the 1987 State Wage Case decision; there was an industry resistance to negotiating increases with offsets. In 1989, the TWU's membership having an attitude so negative to enterprise bargaining, an industry-wide agreement was negotiated with the RTA for a four per cent movement in the award with widening of the spread of ordinary hours and greater flexibility in the taking of meal breaks. The evidence continued the history through the early 1990s and dealt extensively with the circumstances which led up to the December 1996 decision of the Full Bench. In relation to the award made by the Full Bench, Mr Forno said: (a) The overall effect of the new award has been to even up the market place. Companies who had not negotiated an enterprise agreement could access the new flexibilities. Since December 1996 the 4 hour casuals and the early start provisions have been universally used in the transport industry. The additional features, such as Saturday work, are generally customer driven. This flexibility is increasingly used as the retail sector continues to expand into weekend trade and calls upon their transport operators to provide a Saturday transport service. (b) In September 1997 the Union's Committee of Management resolved to initiate a new wage campaign called the "5% plus 5%" campaign whereby transport companies were required to pay an additional 5% by December 1997 and a further and 5% compounding by December 1998. (c) As contrasted with the 1994 "fair wages" campaign, no significant award trade offs were involved in this campaign. There are a number of reasons why the Union did not offer award trade offs as of this campaign, namely: (i) The claim for 5% plus 5% wage increases was less than the 15% fair wages campaign claim; (ii) The membership would be hostile to negotiating further Award trade offs only nine months after the most significant changes to working conditions on record were introduced into the Award. It was felt that any further trade offs would be considered as cutting into core award conditions; (iii) The 15% movement in the Award had been paid for in full by the offsets and the two outstanding $8 safety net adjustments from the 1994 State Wage Case. The membership expected that the next round of wage increases be funded by the employers out of increased profitability; and (iv) Although the Union was unwilling to negotiate on award conditions, there was scope to explore other productivity measures, not related to the award which could be used by the companies to offset the claim. For example the introduction of Key Performance Indicators and the utilisation of drivers to perform loading duties when they would be otherwise idle during working time were considered by the Union when proposed by particular companies. (d) The union has not been able to penetrate the transport sector with its 5% plus 5% campaign to the same extent as the 15% campaign. The Union has approximately 16,000 members whose employment is covered by the award. The 5% plus 5% campaign has delivered increases for about 50% of our membership covered by the Award. This contrasts with the 15% fair wages campaign, which had delivered wage increases for about 70% of our membership in the Award area between 1994 and 1996 prior to the Commission varying the award in December 1996. (e) The 5% plus 5% campaign has been less successful because of two factors. Firstly, the massive increase in flexibilities obtained under the 1996 Award has lessened the incentive from the companies to bargain. Secondly, the industry is more intensely competitive than ever before. Clients are expecting operators to cut the real cost in providing transport services. More and more transport contracts are being put out to tender, with the lowest bidder on cost alone winning. Other contracts are performance based "evergreen" contracts where a transport operators (sic) will keep the contract for a long as the transport cost are limited to predetermined levels. Some of these contracts allow for increases capped at CPI inflation. Other transport contracts expect no increases in transport costs and an increasing number are based on actual cost reductions.

[34]

24 Mr Tinney has been employed in the transport industry for approximately 25 years, his positions including the role of General Manager, Industrial Relations with TNT Australia. He gave evidence in the proceedings before the Full Bench in 1996, reference to which has already been made. The evidence in these proceedings identified the size and scope of membership of the RTA which consists of approximately 500 companies ranging from very large to medium and smaller transport operators. Approximately 70 per cent of the membership is estimated to operate 10 trucks or less. Members of the RTA employ an estimated 20,000 employees and operate approximately 10,000 trucks. Mr Tinney gave similar evidence to that which he gave in the 1996 special case; in particular the policy of the RTA of achieving, over time, a seven day, 24 hour servicing of customers at reasonable cost. He observed, based on numerous discussions he had had with managers of transport companies, that the variations made to the award to offset costs in the 1996 case have been "of real practical benefit, particularly in the areas of casuals and the more flexible working of ordinary hours, and to a lesser extent shift work". Mr Tinney's evidence dealt with the development of the agreement in the present proceedings and explained the view of the RTA membership to the particular award variations which will achieve suitable flexibilities and efficiencies in operations. In the course of his evidence he expressed the opinion that the agreement "will have real practical benefits for transport operators and, at the same time, provide transport workers with enhanced rates of pay. The phasing in of the proposed increase will also allow both transport operators and their customers to better accommodate the cost increases associated with it". He indicated that the pressure for the provision of a seven day, 24 hour service have increased. He acknowledged that not every transport operator will use every one of the flexibilities provided in the agreement but expressed the belief that there is something in the agreement for the overwhelming majority of transport employers.

[37]

27 He gave evidence of the experience of the company from September 1999 when an approach by the TWU sought increases in rates of pay of five per cent and five per cent and three per cent, three per cent, and three per cent. Stoppages of work took place on 28 January and again on 7 February but no agreement had been reached. Mr Brooks participated in the RTA's reaching agreement in the present proceedings. In relation to that agreement he said: It is my opinion, based on my knowledge and experience of the transport industry over approximately 25 years that the changes proposed provide for significant flexibilities and efficiencies in relation to the working of ordinary hours of work. While Brooks Transport will not take immediate advantage of all of the changes proposed within the current structure of its operations and customer base, there are nevertheless some significant benefits that will be available to Brooks Transport as a result of the agreement. The most significant proposed variation to the award to Brooks Transport is that dealing with the span of daily ordinary hours of work. The Transport Industry is under increasing pressure to provide services early in the morning to its customers. Brooks Transport has experienced this pressure and, as stated previously, a principal benefit to Brooks Transport from the 1996 Special case arrangements was the increase in the spread of hours. Once again, the increase in the spread of hours proposed in the 2000 Agreement will be of immediate benefit to Brooks Transport. The potential cost saving to Brooks Transport in relation to employees commencing their ordinary day at 5.00 am is 2½ hours ordinary pay per week, or in the case of a Transport Worker Grade 7, $35.00 per week. The increase in the spread of hours will also have the effect of allowing many transport workers to avoid the heavy traffic congestion that now occurs, particularly in Sydney, in peak hour. The ability to commence work earlier and avoid this traffic congestion will benefit transport workers, particularly in the summer months when it can become quite hot early. The combination of heat and traffic congestion can place additional stress upon a transport worker which will be avoided in a variety of cases through the increase in the spread of hours as transport operators will be more prepared to fix starting times at an early hour if they do not incur payment of overtime in doing so. The avoidance of peak hour traffic congestion may also result in the actual delivery being performed in a lesser number of hours and also save on fuel cost associated with the constant starting and stopping that occurs in peak hour.

[38]

28 A.J. Mills & Sons Pty Ltd is a regionally-based transport operator principally operating in northern New South Wales and into Queensland. The company operates 150 trucks and employs 106 drivers under the Transport Industry (State) Award. Mr Mills, who was a witness in the 1996 case, gave evidence in support of the current agreement. That evidence included the following: The immediate benefit which Mills Transport can obtain is from the new spread of hours. The effect of being able to start my employees at 5.00am will give me a greater flexibility at arriving at customer destinations at their opening time. The effect of being able to arrive at my customer's depots at starting time enables me to avoid the congestion of other trucks and carriers arriving there at different times. That will mean that I can deliver the goods in a more efficient manner and utilise the trucks more efficiently. Further, it will give greater flexibilities in respect of drivers who driver from regional cities to major capital cities by leaving earlier and avoiding traffic congestion and problems associated with those capital cities. In terms of quantifying the benefits to mills Transport in a dollar amount the effect of being able to start at 5.00am means a saving of about 2½ ordinary hours pay per week. If one performs a calculation based on a Grade 7 Transport Worker that equates to approximately $35.00 per week per driver in savings to Mills Transport. Mills Transport currently has a number of employees who start at 5.00am and are paid penalty rates between the hours of 5.00am and 6.00am. If Mills Transport were to work these employees on an early morning shift it would have to pay a 12 ½% loading. That equates approximately an additional hour's pay. By increasing the span of hours it removes the need to start or adopt the option of putting these people on an early morning shift. Mills Transport in the past had not seen benefit in utilising the early morning shift because of the cost restriction. The greater span of hours now proposed in the agreement will also achieve savings for the company in relation to the spread of hours. Mills is also involved in a conglomerate organisation called C.D.M. Logistics, which provides transportation services for the Woolworths Group. There is an ever increasing demand by the retail sector that goods be delivered seven-days per week twenty four hours a day. At the time of making the statement CDM is in discussion with the Woolworths Group regarding this very issue. Woolworths had approached the group to potentially seek the distribution of goods on a seven day twenty four hour basis to relieve pressures on their own warehouses. The proposal to work Sundays as part of the ordinary hours in conjunction with the ability to work Saturday which is already in the award as a result of the Special Case will provide an opportunity for CDM to provide a new service which will result in a greater utilisation of equipment. The obvious result which flows from the greater utilisation of capital equipment is a savings to the company.

Transport Industry (State) Award - Application by Transport Workers' Union of Australia, New South Wales Branch for a new award; Application by Employers' Federation of New South Wales for variation of award. [2000] NSWIRComm 42

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Judgment (49 paragraphs)

Cases Cited (3)

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