Transport Workers' Union of Australia & Ors v Mayne Nickless Ltd [1997] FCA 1514

(a) Where the contract driver has between three (3) months and ten (10) years of service an additional 27% provided that the minimum payment shall be $1,000. (b) Between 10 and 15 years of service 40% provided that the minimum payment shall be $1,500. (c) In excess of 15 years service 50% provided that the minimum payment shall be $3,000. (d) Prior to an owner driver becoming entitled to the appropriate percentage prescribed by Sub Clause (a), (b) or (c) of this Clause, he/she shall have used the vehicle which is being sold on company work for a minimum period of 12 months. (e) These amounts will be reviewed annually to take account of CPI changes. 11.2 Non Sale of Vehicle to Company Should a contract driver elect not to sell his/her vehicle to the company (on termination) he shall receive the following amount in addition to termination monies to which he is entitled. Where the contract driver has between three (3) months and 10 years service $2,617. In excess of 10 years service $4,711. (Rates adjusted to June 1992). These amounts will be reviewed annually to take account of CPI changes. The owner-driver agreement also contains a mechanism for the avoidance and settlement of disputes in cl 16 in these terms: (1) If after a workplace meeting further discussions are required between the parties and no resolution can be found, it is agreed that the Dispute Avoidance and Settlement Procedure will be invoked and normal work will continue to allow the procedure to occur. (2) Disputes Prevention and Settlement Procedure: The objective of this procedure is to establish a means of achieving an expeditious and consistent resolution of issues raised in the workplace without disruption to normal work. (i) Subject to the Conciliation and Arbitration Act 1904 (as amended) any dispute shall be dealt with in the following manner:

(a) The issue or problem will in the first instance be discussed by the employee and his/her immediate supervisor. The employee's yard delegate may provide assistance if the employee wishes. (b) If the issue or problem cannot be resolved between the employee and the supervisor, then the issue should be referred to the supervisor's manager for resolution. This step may involve discussions including the employee, delegate, supervisor and manager. (c) In the event that the issue continues to remain unresolved, the issue should be referred to the operations manager and the state secretary or his/her nominee and delegates for discussion and resolution. (d) Should the issue continue to remain unresolved, then it should be referred to the state manager and employee relations manager for discussion with the state secretary of the Victorian Transport Workers' Union or his/her nominee. (e) If resolution of outstanding matters cannot be achieved within three working days (Monday-Friday) hours of commencement of this procedure, the officers of the Union and the Company shall become involved and if necessary the matter shall be referred to an Independent Arbitrator who will be sourced from the Australian Industrial Relations Commission (AIRC). The parties agree to accept the recommendation of the Arbitrator. This Arbitrator will conduct a private conference which will not be subject to the provisions of the Australian Industrial Relations Act (1988 as amended). (f) All work shall continue normally while these negotiations are taking place. No party shall be prejudiced by the application of this procedure. A "code of conduct" is embodied in cl 21 stipulating: (1) The following Codes of Conduct have been designed to ensure all Campbellfield contract drivers clearly understand their obligations/responsibilities with regard to acts of dishonesty, company policy and general discipline: (i) Theft is a dismissible offence. (ii) In circumstances where a contract driver suffers a loss of licence for any reason, the contract driver must make available himself his/her vehicle and a suitable replacement driver (to be agreed with the company) for the period. If the contract driver chooses not to comply with this Clause, he shall become ineligible for payments due under Clause 10 of this Agreement (excluding 10.4 (ii)). (iii) Fighting - may be dismissed following investigation. (iv) All other issues concerning misconduct will be dealt with through the disciplinary and disputes procedures. 2. To ensure that employees are aware of the existence of a Code of Conduct, this will be posted on all depot noticeboards. The above Code is not exhaustive and employees should take care and avoid placing themselves in such a situation. The third warning for the same offence is to be deemed the final warning and any further breaches will result in dismissal. Consultation with yard delegates will take place prior to any action under the warning process. The period of operation of the agreement is defined by cl 22 in these terms: This Agreement rescinds and replaces all previous Agreements and shall operate from the first pay period commencing on or after 1 January, 1997 and shall remain in force, unless varied by agreement between Contract Drivers and their representatives, Management and the TWU, until 31 December, 1998. Discussions on this agreement are to commence at a time no later than 1 October, 1998. In May 1997, the Federal Council of the Transport Workers Union of Australia ("the TWU") of which the owner-drivers are members, adopted a wages policy which involved the pursuit of a two-phase 10% increase for all workers in the industry. A document embodying that policy contained these statements: This meeting of TWU Delegates employed in the General Cartage area of the Transport Industry resolves to support the TWU Federal Council 1997-98 Wages Policy which sets out to deliver a 5% wage increase for 1997 and a further 5% wage increase for 1998 with 2-year Enterprise Bargaining Agreements expiring on 30 June 1999. We state that as part of the negotiations, we expect our companies to address the issues of: w job security for members and permanency of employment w workplace safety for members and Duty of Care by employers w retention of TWU Superannuation Fund w retention of all Award conditions w introduction of an income protection scheme w observance of TWU rates and conditions for Owner/Drivers MNL's response to the adoption by the TWU of that policy was set out in this letter dated 1 September 1997 from its Chief Executive Officer, Mr Turner, to the Federal Secretary of the TWU: I thought it would be timely to bring you up to date on the progress of discussions with the State Offices in respect of your claim. Declan Byrne and/or myself have met with all State Secretaries over the past two weeks to discuss this claim. In all meetings we have been consistent with our message that we need to negotiate for employees and contract carriers separately, and that a 10% increase cannot be paid without productivity gains. Our State managers have been instructed to progress EBA negotiations for our employees and I am confident that a satisfactory outcome will be achieved. Our change of policy in respect to contract carriers has created some uncertainty and confusion. It is not our intention to terminate all contract carriers as some are proclaiming. Our policy will be to convert them to employees, or for them to continue as contract carriers under a new Agreement. There will be no redundancies. We have sought the views and concerns of contract carriers. These have been taken into account in the preparation of the new Agreement, which is expected to be completed in two weeks' time. The unsatisfactory financial performance of Mayne Nickless Express is understood by many of our employees who are concerned about their future security. I believe that everyone including management accept that this is "our last throw of the dice" and without significant improvement we will not be allowed to continue. I trust that negotiations for this claim can continue in a dispute free environment as industrial disruption will make the task of turning this business around impossible. On 28 August 1997, a meeting had been held between delegates of the TWU and managerial representatives of MNL. A note of that meeting by one of the MNL representatives recited: · Contract Carriers. đ Convert to Company Drivers đ Become Contract Carriers Inc on contract · E.B.A. in place for further 18 months. · No interest from any Contract Carrier to become Company Drivers (Different rates of pay, redundancy, etc.) · What if the two options are not taken by Contract Carriers? ISSUES w Why convert Contract Carriers in the first place? w $1200 cost for Inc. Company. w How are previous years of service to be handled? w No redundancy for Inc. Company. w Rate of Pay. w Termination Notice - Will it be 12 months? w No provision for A/L - Vehicle Requires seven (7) days, twenty four (24) hours w Continuation of service ceases immediately. w Would need to have individual contracts, (A.C.C.C.) complications. w What is the time frame for the conversion? w Want one contract to cover all. Not individual agreements. Further meetings were held between MNL managerial representatives and TWU delegates on 24 September 1997 and 15 October 1997 at which proposals were made on behalf of MNL for a revision of its contractual arrangements with owner-drivers involving their conversion to employees or incorporated contractors. A question was raised on behalf of the owner-drivers at either or both of those meetings as to what redundancy arrangements would apply to those owner-drivers who chose not to enter into the proposed new contracts. Mr Declan Byrne, the Manager, Employment Relations for MNL replied, in effect, that the company would not make any redundancy payments because it was offering ongoing employment. Minutes of the meeting of 24 September prepared by representatives of MNL contained these extracts: · Declan gave a summary of the approach and the process. · Open and clear, keeping it simple. · Judge us by our actions. · Offer has been made to all Contract Carriers for 2.5% increase up front under the M.O.U. · The current agreement has not been signed. · We need a signed agreement. · We will work to the current unsigned agreement. ... · It is agreed that both parties and the TWU will review the current unsigned agreement for Ipec Road Express Contract Carrier and remove those words or paragraphs that don't clearly express the Contract Carrier relationship with the Company. · MNE to provide a rate document by 15 October, 1997 that will be prepared by Rod Boucher. ... · We need to address each of the issues. · We need to gain agreement to a timetable on this process. · We will not rush the outcome, we need to get it right the first time. · It needs to be a collective agreement in the Campbellfield yard. · We would like responses by 13 October, 1997 re any concerns regarding the "agreement". · We would like to have a meeting on 15 October, 1997 to review the "agreement". · You should take it away and have it re-checked. · Another meeting to finalise the agreement should be held on 28 October, 1997.

· On 29 October, 1997 or up to 3 November, 1997, we would like to have a meeting with groups of 10 Contract Carriers at a time to present the "agreement" and then a meeting of all involved to sign off. · We would like to put the new "Contract Carriers' Agreement" into place and work with it effective 7 November, 1997. · Patrick Kasso responded to a question from Gordon Stanley on the current wages and earning being diluted by stating that we would continue to operate under the current Agreement (as amended), until a Contract Carrier's Agreement is signed. · Gordon Stanley suggested that all Contract Carriers need to be happy on what they take home in their pay packets. · Patrick Kasso outlined that we will not survive with our peaks and troughs unless we vary our costs. ... · Mario Kovacic tabled that Mayne Nickless wanted to disassociate itself from the current owner driver arrangements. · Declan Byrne responded that it was going to occur and a Contract Carrier association will be achieved or the option of converting to a company driver was available. ... · Shane Crapper asked about the "exit" opportunity, Declan Byrne responded that this was not an option. ... · Shane Crapper asked if he could feedback to the Contract Carriers that if agreement cannot be achieved between the parties, then the company would abide by the current industrial agreement. · Declan Byrne responded by suggesting that if a fair outcome and agreement cannot be reached between the parties, then each party would then do what was needed to be done. · Declan Byrne tabled that there are only two options - a Contract Carriers arrangement that represents our future relationship or the conversion to Company employees, there will be no third option - ie. no "exit". · Declan Byrne tabled also that total trust was very important and if no trust exists we should walk away now. At the meeting on 15 October 1997 there was a point by point examination of a draft "MNE Contract Carriers Agreement" dated 15 September 1997 which had been circulated by MNL to the Victorian Branch of the TWU. That draft included the following clauses: 1. Appointment of Contract Carrier Subject to the Contract Carrier: (a) being an incorporated company in accordance with the laws of the Commonwealth and the applicable State and/or Territory, and (b) having a Workers Compensation Insurance Policy including coverage for the Approved Driver and any other employee, representative or agent engaged by the Contract Carrier, and (c) being a "Participating Employer Member" of an approved superannuation fund, and (d) receiving correspondence from the Principal Contractor acknowledging the Contract Carriers engagement under this Agreement, the Principal Contractor hereby engages the Contract Carrier and the Contract Carrier hereby accepts the engagement for the provision of transport services in accordance with this agreement on the terms and conditions set out herein. ... 3. Responsibility of the Contract Carrier ... 3.2 The Contract Carrier shall provide transport services in accordance with the Code of Conduct (Clause 13) and ensure that the Approved Driver also complies with these conditions of engagement. The Contract Carrier undertakes for the life of this agreement not to engage either individually or collectively in any conduct which results in transport services being provided in a manner different from that by which this agreement provides. ... 8. Sale of Vehicle with Run All work remains the property of the Principal Contractor and under no circumstances can: (a) a run be sold (b) a vehicle be sold with a right to a run Goodwill remains the property of the Principal Contractor and is not transferable under any circumstances. ... 13. Code of Conduct The following Code of Conduct has been designed to ensure all Principal Contractor officers, including management, and Contract Carriers understand their obligations and responsibilities with regard to general discipline. All Contract Carriers are required to ensure that their Approved Driver: (i) Works in a safe and healthy manner. (ii) Treats clients and colleagues with honesty, courtesy and respect. (iii) Effectively provides transport services in line with business objectives and this Agreement. (iv) Provides transport services as required under this Agreement. (v) Reports any inability to provide transport services immediately. (vi) Ensures all documentation is completed correctly as directed. (vii) Makes themselves familiar with the Principal Contractors policies and procedures as set out in Schedule 2 and shall ensure compliance with such policies and procedures. (viii) Makes themselves available for training which is deemed appropriate or necessary to perform transport services for the Principal Contractor. (ix) Complies with the applicable motor traffic laws at all times whilst performing transport services for the Principal Contractor. 14. Termination of Permanent Contract Carriers 14.1 Termination by the Contractor Carrier (a) Unless otherwise specifically agreed between the Principal Contractor and the Contract Carrier, the Contract Carrier shall give four (4) weeks' notice of termination to the Principal Contractor in writing. During the period of notice, the Principal Contractor reserves the right to travel a learner with the Contract Carrier for familiarisation purposes. (b) At the expiration of the four (4) weeks, the Contract Carrier shall be paid all money due, provided that: (i) Uniforms supplied have been returned cleaned to the Principal Contractor. (ii) Sign-writing done by the Principal Contractor has been removed or painted out. In the event of damage to the paint work and/or vehicle during the removal of the decals, the Principal Contractor will bear the cost of and "make good" the affected areas of the vehicle in the case of a Contract Carrier ceasing to undertake Contracts of Carriage with the Principal Contractor. The Principal Contractor will nominate an appropriate organisation to carry out such work/repairs. (iii) All monies collected on behalf of the Principal Contractor have been accounted for. (iv) Identity cards and keys issued to the Contract Carrier have been returned to the Principal Contractor. 14.2 Termination by the Principal Contractor (a) The Principal Contractor may terminate a Contract Carrier by giving four (4) weeks written notice to the Contract Carrier. (b) In the event of serious misconduct or a breach of this Agreement, including the responsibilities that are incidental to performing transport services under this Agreement, by the Contract Carrier, its employees, representatives, or agents, the Principal Contractor may terminate a Contract Carrier immediately without notice and without any further obligation or liability to the Contract Carrier.

For the purpose of this clause, "serious misconduct" justifying immediate termination includes, but is not limited to, the following actions by the Contract Carrier and/or the Approved Driver: (i) The consumption of intoxicating liquor on duty, or being under the influence of alcohol or an illegal drug while providing transport services. (ii) Falsifying document submitted to the Principal Contractor, misappropriation of cash or equipment belonging to the Principal Contractor. (iii) Being dishonest or abusive while performing transport services for the Principal Contractor or in dealing with the Principal Contractor or its clients, consignors, consignees or their representatives. (iv) Acts contrary to the interests and safety of the Principal Contractor, other Contract Carriers, employees and/or clients of the Company. (v) Failure to carry out a reasonable demand by the Principal Contractor under terms of the Contract, immediate. (vi) Failure to fulfil any fundamental conditions of this agreement. 14.3 The Contract Carrier expressly agrees that whilst performing transport services for the Principal Contractor and for a period of twelve (12) months after the Contract Carrier's termination, for whatever the reason for the termination, that it will not: (i) engage in, or directly or indirectly assist any person, firm or corporation to, perform transport services in direct competition with the Principal Contractor; or (ii) for itself or on behalf of any person, firm or corporation, act in any way which may assist or induce any employee, servant, agent, client or contractor of the Principal Contractor to breach any agreement or contract with the Principal Contractor; or (iii) for itself or on behalf of any person, firm or corporation, provide, offer to provide, solicit or otherwise procure or attempt to procure, the provision of transport services to any clients of the Principal Contractor which formed part of the service that the Contract Carrier provided to the Principal Contractor. ... 16. Settlement of Disputes The parties agree that in the event of a question, dispute or difficulty arising from the content of this Agreement, the following procedure shall apply:- (a) (i) the matters shall first be discussed between the aggrieved Contract Carrier(s) and the local Principal Contractor representative(s). (ii) if not settled the matter shall then be taken up by an accredited Union Representative or Union Organiser with the local Principal Contractor representative(s). (iii) if the matter is not settled it shall be referred to the State Secretary and State Principal Contractor representative (or respective nominees) and may also include involvement of an industrial officer of the Principal Contractor. (iv) if the matter cannot be settled at this level then the parties shall refer the matter to the Federal Secretary and the Principal Contractor's Chief Executive Officer, or their representatives, in attempt to settle the matter. (b) Except in the case of a bona fide safety issue, Contract Carriers will continue their engagement in accordance with their contract, or at direction of the Principal Contractor. (c) A party shall not be prejudiced as to final settlement by the continuation of engagement in accordance with this process. (d) The parties agree to a cooling off period and reasonable time frames between each stage of the process contained in (a) above. ... 21. Term of Agreement Subject to Clauses 14 and 15, this Agreement shall come into effect from {day} {month}, 1997 and remain in force for a period of twelve (12) months or until the execution of a new Agreement. Discussions will commence three (3) months prior to the end of the twelve month period with regard to putting in place a new Agreement.

Mr Nash, the TWU organizer with responsibility for members based at the MNL Campbellfield depot, prepared a document indicating in a very summary way each part of the draft agreement to which I have just referred which was of concern to the owner-drivers. A copy of that document dated 14 October 1997 was supplied to Mr Byrne in advance of the meeting on 15 October and included these notes: CL 14.1 A = Requires discussion. CL 14.1 (ii) = Requires discussion. CL 14.2 A = No compensation for termination - (need discussion). CL 14.2 B = Requires discussion. CL 14.2(iii) = Add "proved". CL 14.2 (v) = Requires discussion. ... CL 13 (viii) = Requires discussion. ... CL 16 B = Needs discussion. ... CL 21 = Requires discussion. Minutes of the meeting of 15 October prepared by representatives of MNL included these passages: Discussions re: Contract Carriers Agreement. The following represents an overview of the general discussion held between the above named persons. Many of the below issues will require more detailed clarification from the union, the Contract Carriers and the Company. None of the above commentary represents an agreement between the parties. · Declan welcomed all and confirmed with Steve Nash that the M.O.U. was accepted, payment of this 2.5% will be processed with the next 2 weeks. ... & Declan then asked for feedback from T.W.U. to the draft copy of the M.N.E. Contract Carriers Agreement dated the 15th September, 1997 which had been circulated. Steve Nash responded that there were no barriers to the revised - but there were a number of areas that needed further clarification. ... Point (3) 3.2 The Contractors Carriers unwilling to accept Code of Conduct (Clause 13) Declan to seek further advice. ... Point (21) 13. Declan stated will be taken out and form part of Company Policy Procedure - Peter Earle suggested that this is an issue to the T.W.U. as they have no input to Company Procedures. ... Point (23) 14.2A Steve Nash stated that this needs further discussion. Declan advised once again that the Contractor Carriers should seek specific legal advice re Company's right to terminate contracts. The objective is to clearly understand that both sides have equal rights. Both will review. ... Point (26) 16.B Remove "At the Discretion of the Principal Contractor" and add the following words "in the case of a bona fide safety issue, alternative engagement will be identified by the Principal Contractor". Declan to review. Point (27) 16D In case of Industrial Disputation T.W.U. what are the cooling off periods? Declan would like to take out current Company Policy and revert to Commercial Contract. Point (28) Both parties will review Clause 21. Next Meeting to be rescheduled by Declan all parties to be advised at which time further discussions on Payment Structures will proceed. On 14 October 1997, agreements on remuneration had been reached between MNL and the TWU. That in respect of owner-drivers was embodied in a separate Memorandum of Understanding ("MOU") in these terms: 1. This Memorandum of Understanding (MOU) shall only apply to employees of the Company in the States of Victoria, South Australia, Tasmania, Queensland and Western Australia who are employed in accordance with the Transport Workers Award 1983. 2. The wage outcome below will be subject to the signing of this Memorandum of Understanding. The purpose of this MOU is to provide stability for the company and its employees over the next few months as the company is going through major restructuring and change, and notwithstanding the uncertainty of the business in the current financial and economic climate.

Grade Current Mayne Nickless Current Mayne Nickless Express Rate Express Rate + 2.5% 1 422.28 432.82 2 439.88 450.87 3 448.73 459.95 4 461.96 473.50 5 470.70 482.46 6 479.55 491.54 7 488.41 500.62 8 510.26 523.01 9 523.48 536.57 10 545.45 559.08

3. The duration of this MOU will be for six (6) months from the date of signing. The parties agree that this MOU will be presented to the Australian Industrial Relations Commission for filing to demonstrate that the parties have bargained in good faith and as a consequence bring to an end all existing bargaining periods against the Company. 4. The Union undertakes that there shall be no further money increases for the life of this MOU including increases as part of any National Wage Case decision or any other claim commenced or pending. 5. The parties agree that negotiations with the Branch Secretaries, that are signatories to this MOU, will commence for the second 2.5% wage outcome four (4) weeks prior to the conclusion of the nominal expiry date of this MOU. 6. The parties further agree to the following: (i) that the second 2.5% wage outcome will be made no later than 30 June 1998 and will be offset by productivity and efficiency arrangements negotiated on a site by site basis. (ii) that a further wage outcome of 5% will be negotiated prior to 30 June 1999 and shall be offset by productivity and efficiency arrangements negotiated on a site by site basis. (iii) the parties are open to pursue a comprehensive stand alone Company Agreement and will positively encourage employees to achieve this objective utilising site by site outcomes. 7. The Union undertakes to provide a dispute free period during the life of this MOU by adhering to the dispute procedure.

Attachment 1 was in terms broadly similar to cl 16 of the Owner Drivers' Agreement and was expressed to be applicable to: any dispute or claim (whether any such dispute or claim arises out of the operation of the MOU or not or whether it is within one State or not) as to the wages and/or conditions of employment of any employee with regard to whom any employer is bound by this MOU and/or as to any other industrial matter pertaining to the relations of the Company with its employees. On 6 November 1997, MNL forwarded to the TWU a draft revised version of the owner-driver agreement which had regulated the engagement of owner-drivers since 1 January 1997. However, it was accepted on both sides, I find, that the later document was put forward merely by way of tidying up certain of the provisions of the subsisting owner-driver agreement and did not reflect that any agreement had been reached on the matters at issue in the meetings of 24 September and 15 October. At the end of November 1997, an industrial dispute had arisen between the Australian Services Union ("the ASU") and MNL over the failure to conclude an enterprise bargaining agreement regulating the wages and conditions of clerical employees of MNL. On the morning of 27 November, Mr Boucher told a meeting of MNL drivers that the dispute with the ASU remained unresolved and he expected that a picket line might be established, in which event the drivers would be required to maintain a full pick-up and delivery service. As he foreshadowed, in prosecution of its dispute with MNL, the ASU, on the afternoon of 27 November 1997, established a picket line at the entrance to the Campbellfield depot. The picket line allowed drivers to return their vehicles to the depot unladen but it was indicated that no loaded vehicle would be permitted by the picketers to leave the depot. Instructions were given by two-way radio to owner-drivers to complete their deliveries but not to pick up any freight. Accordingly, the owner-drivers returned to the depot unladen and were allowed to pass through the picket which by then had been established. Some owner-drivers who reported for work on the morning of Friday, 28 November loaded their vehicles upon arrival but a meeting of TWU members including both employee drivers and owner-drivers was held at the MNL yard early on that morning. Some concern was expressed at that meeting that the safety of drivers might be threatened if they were to attempt to drive vehicles through the picket line. There was also concern that an attempt to break the picket line might result in the driver concerned being stigmatised as a "scab" and exposed to later adverse repercussions. Some vehicles remained unladen, and no attempt was made by any vehicle carrying freight to cross the picket line. To ensure the security of its premises and customers' goods, MNL deployed security guards in the area of the picket line. Police officers attended on three occasions during the first two days of the picket, at about 9.00pm on 27 November, at about 9.00am on 28 November and at about noon on the same day. The observations of the officer-in-charge were that the picket was peaceful and, although he saw no vehicle attempt to cross the picket line, he did not consider it necessary to maintain a continuous police presence. That officer did not observe any of the picketers drinking but I am satisfied that there was some consumption of alcohol by the picketers from the time when the picket was established. I am also satisfied that a semi-trailer leaving MNL's premises was forced to swerve and come to a stop very close to a picketer obstructing its passage. That event was regarded as sufficiently noteworthy to be the subject of an "incident report" to MNL's State Manager, Mr Boucher. Some picketers made threatening and abusive remarks to employee drivers and owner-drivers as they passed through the picket line with empty vehicles. It does not appear that, in the events which happened, any attempt was made to secure the passage of a vehicle through the picket line under police protection or with the assistance of any of the security guards. However, after he had been acquainted with the concerns for their safety said to be held by some TWU members, Mr Boucher told TWU delegates and a TWU organizer, Mr Nash, that MNL could promise drivers safe passage across the picket. Several requests were made for drivers to cross the picket and take freight out of the yard but those requests elicited no positive response. It is common ground that by about noon on 28 November, the owner-drivers understood that MNL required them to carry out their ordinary duties which would involve crossing the picket line but they chose not to do so. Although some genuine fears were entertained by owner-drivers for the safety of themselves or their vehicles or of the picketers if they were to cross the picket line, I am satisfied that the refusals to cross it were also motivated by a desire to adhere to a long-standing TWU policy that picket lines should not be crossed and by a concern to avoid the opprobrium and, possibly, other reprisals which would be attracted from other workers by breaking a picket line. Evidence was given by a number of owner-drivers with long experience as contractors to MNL of previous occasions when pickets had been established either at the company's premises or at the premises of customers to whom deliveries were required to be made or from whom freight was to be collected. On each of those occasions, it was said, MNL had either given instructions not to cross the picket line or had acquiesced in drivers not crossing it. However, on one occasion in 1992, Mr Hellyer acknowledged that MNL had indicated that drivers who did not cross a picket line maintained by members of what was then the Federated Clerks' Union would not be paid for that day. At about that time, MNL issued the following statement of its attitude or policy: PICKETS/PICKET LINES Mayne Nickless does not recognise pickets or picket lines. The following guidelines should be applied by management when confronted with a picket situation at the worksite. These guidelines are intended to assist in dealing with difficult situations. Any instances of pickets, etc, should be advised to the Industrial Relations Group for advice on specific situations. · Mayne Nickless will not direct employees or owner/drivers (O/D's) to cross picket lines if it is likely to place them at physical risk. · Any employee (O/D) who does not work as directed will not be paid. · Any picket line imposed at a Mayne Nickless depot or yard affects all members of that union(s) on site i.e., there is no distinction between employees and O/D's. Thus, if O/D's establish a picket and employees refuse to work as directed then they will not be paid. The reverse situation equally applies. The same logic applies to TWU and FCU members. · If an employee (or O/D) crosses a picket line to 'clock-on' and commence work and then refuses to work as directed, that employee (or O/D) will not be paid. · Mayne Nickless will not involve police in picket lines except in circumstances where, in the judgement of management, public safety could be at risk. · Mayne Nickless is prepared to take all steps available to safeguard its business operations, including appropriate legal action. · Freight remains the property of the client at all times. Clients may collect freight if they so wish. · Pickets should not interfere with the movement of essential services freight. This should be defined and agreed at local level. · Casual employees are covered by these guidelines. Early in the afternoon of 28 November 1997, Mr Boucher suggested that the drivers should "just go and do some pickups" and indicated a willingness to accompany the TWU delegate, Mr Nash, to speak to the ASU picketers about that proposal. However, as they approached the picket, Mr Boucher was told by Mr Byrne that the police had already spoken to the picketers about the right of MNL to continue doing business and it was not his (Boucher's) role to negotiate with the picketers. Mr Boucher thereupon did not accompany Mr Nash who, on his own, made no overtures to the picketers. Later in the same afternoon, Mr Boucher had separate meetings with owner-drivers and employed drivers and indicated that, as further work that afternoon by either group was impossible, they should unload their vehicles, go home and report for work at 7.30am on the following Monday, 1 June 1997. When Mr Crapper, the TWU owner-driver delegate, asked whether owner-drivers would be paid for that day despite their inability to work, Mr Boucher indicated that the owner-drivers should return to the gate where they would be advised of the company's attitude. After that instruction was given, Mr Boucher reported to his superior, Mr Kasso, the General Manager, Ipec/Jetsroad, who deposed: 8. At approximately 2.30pm on 28 November 1997 both myself and Declan Byrne were provided with a further briefing by Mr Boucher. Mr Boucher advised that employees and contract carriers had been directed on a number of occasions to carry out normal delivery and pick up duties but that the employees and contract drivers had refused to cross the picket line. Mr Boucher indicated that due to all TWU members not being willing to cross the ASU picket line he had no alternative but to request the employees to clock off and go home and to return to Campbellfield as per normal shifts on 1 December 1997. Mr Boucher sought my advice as to what the position should be with respect to the contract carriers given their refusal to carry out their normal duties. I advised Mr Boucher that having regard to the refusal of the contract carriers to work as directed, notwithstanding the fact the company provided police and security staff for their safe passage through the picket line and the fact that management had pleaded with the drivers over the past four days to fulfil their obligations under their contract so that we could continue to service our customers needs, I considered the conduct of the contract carriers amounted to a termination of their contracts with Ipec. I advised Mr Boucher that he should call the contract carriers together at the front gate and advise them that Ipec accepted that the contract carriers had terminated their contracts with Ipec by their action in refusing to fulfil their contracts. 9. There were two reasons for my decision to instruct Mr Boucher in the terms set out above. First, I considered the relationship between Ipec and the contract carriers to be a business relationship under which the contract carriers had accepted a responsibility for the delivery and pick up of freight as directed. The contract carriers are not employees. They own their own vehicles and are fully responsible for all maintenance costs associated with those vehicles. They do not pay tax via the pay as you earn system, but rather through the prescribed payment system which is only available for independent contractors. Second, unlike the employee drivers, there were no other duties which could be allocated to the contract carriers once they refused to perform their normal driving duties. Employee drivers who refused to cross the ASU picket line could be allocated alternative duties such as loading and unloading freight, washing trucks, cleaning company equipment and premise and loading or unloading line haul vehicles. After the owner-drivers had moved their unladen vehicles across the picket line and parked them outside the depot, they returned to the gate where they were addressed by Mr Boucher who said words to the effect, "This has been a sad day for Ipec and due to your failure to fulfil your obligations as contract carriers with the company, you have terminated your contracts with Ipec." No similar statement was made to the drivers who were employees of MNL. In the course of Sunday, 30 November 1997, a letter bearing that date and signed by Mr Boucher on behalf of IPEC Road Express was delivered by taxi to each of the owner-drivers. That letter was in these terms: Please be advised that as a result of industrial action taken by members of the Australian Services Union which is unrelated to your terms and conditions of employment, on Friday 28 November, 1997, a picket was placed on the site entrance to the Campbellfield depot. During the course of the day you were repeatedly directed to perform normal loading, delivery and pick-up duties in accordance with your contract of employment. In response to your alleged safety concerns you were informed that the Company, and if necessary, the Victorian Police, would ensure that you could cross the picket line. Subsequently, you continued to refuse directions to perform normal loading and delivery duties without any valid reason. In addition, you refused to perform normal pick-up work without any valid reason. Your failure to comply with these directions constituted a breach of your contract of employment. Your action could not have come at a worse time for the Company and has possibly caused irreparable damage to our business and that of our customers. You are required to work as directed and carry out all normal duties from your normal start time on Monday, December 1, 1997. We will ensure that you can safely carry out all your normal duties. Should you continue to refuse to follow lawful directions and refuse to perform normal duties as required under your contract of employment, your refusal will be considered serious misconduct, and may result in the termination of your contract of employment. Each of those letters was accompanied by two cheques, one representing the amount of the accrued entitlements of the owner-driver to whom the letter was addressed and the other representing seven days' remuneration in lieu of notice. Some owner-drivers have presented and received payment of the proceeds from one or both of those cheques. Others have retained the cheques unpresented. At about 7.30am on Monday, 1 December 1997 all of the owner-drivers reported to the Campbellfield depot for work. The evidence does not suggest that there was any enquiry of any of the owner-drivers as to their readiness to perform normal duties as requested in the letter of 30 November. Two TWU officials and the Union delegates representing the owner-drivers sought a meeting with Mr Byrne. Mr Byrne indicated a willingness to meet the TWU officials but not the delegates who, he said, were no longer working for the company. The Union officials declined to meet Mr Byrne in the absence of the delegates. However, on the next day, 2 December 1997, MNL sent a letter signed by its Chief Executive Officer, Mr Turner, to the Secretary of the Victorian Branch of the TWU. The text of that letter was: I refer to our discussions yesterday, Monday 1st December and, as agreed, have given consideration as to how we can resolve this matter. In particular we considered your request to re-engage the Ipec Contract Carriers. The action of the Contract Carriers to terminate their Agreements and the subsequent damage this has caused our business, has created a situation where the business would be placed in an intolerable position with its customers, management and employees should they return. We cannot therefore agree to your request for their re-engagement. To resolve this matter as per our commitment we offer: That the Contract Carriers will be offered a contract agreement with Mayne Nickless Courier Systems. In accordance with their Agreement the Contractor Carriers have received payment of seven days notice and to date they have suffered no financial loss. This time will permit you to put our offer to them. Your Federal Office has notified the Commission of this matter and we have since been advised that the matter has been listed for conference at 4.00 p.m. today. The employment of all Ipec employees is being threatened by this action as we are a network business. We seek your assistance to conclude this matter immediately as we fear that further damage caused by this action will be fatal. That offer was regarded by each of the owner-drivers and the TWU as embodying terms less favourable than those which had been enjoyed by owner-drivers under the owner-driver agreement and was unanimously rejected. The ASU picket line was removed on the afternoon of Wednesday, 3 December 1997. The present application was issued on 4 December 1997 seeking, pursuant to the Workplace Relations Act 1996 ("the Act"), orders that: 1. The Respondent by itself, its servants or agents, refrain from contravening or further contravening or continuing to contravene Section 298K(1) or alternatively Section 298K(2) of the Act by treating the persons named in the Schedule or any of them as having repudiated their contracts with the Respondent on or about 28 November 1997 and denying to those persons or any of them their rights and entitlements under their contracts with the Respondent. 2. The imposition of the penalties on the Respondent pursuant to Section 298U. The applicants also invoke the accrued jurisdiction of the Court by claiming damages and an order that: 1. The Respondent by itself, its servants or agents, refrain from treating the persons named in the Schedule or any of them as having repudiated their contracts with the Respondent on or about 28 November 1997 and denying to those persons or any of them their rights and entitlements under their contracts with the Respondent. Section 298K(2) of the Act provides: A person must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following: (a) terminate a contract for services that he or she has entered into with an independent contractor; (b) injure the independent contractor in relation to the terms and conditions of the contract for services; (c) alter the position of the independent contractor to the independent contractor's prejudice; (d) refuse to engage another person as an independent contractor; (e) discriminate against another person in the terms or conditions on which the person offers to engage the other person as an independent contractor. A prohibited reason is defined by s 298L which, so far as is relevant, stipulates: (1) Conduct referred to in subsection 298K(1) or (2) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned: ... (l) in the case of an employee, or an independent contractor, who is a member of an industrial association that is seeking better industrial conditions - is dissatisfied with his or her conditions; The orders which the Court may make upon proof of conduct in contravention of Part XA of the Act, which includes s 298K(2), are set out as follows in s 298U: In respect of conduct in contravention of this part, the Court may, if the Court considers it appropriate in all the circumstances of the case, make one or more of the following orders: (a) an order imposing on a person or industrial association whose conduct contravened or is contravening the provision in question a penalty of not more than: (i) in the case of a body corporate - $10,000; or (ii) in any other case - $2,000; (b) an order requiring the person or industrial association to reinstate an employee, or to re-engage an independent contractor; (c) an order requiring the person or industrial association to pay to an employee or independent contractor, or to a prospective employee or independent contractor, compensation of such amount as the Court thinks appropriate; (d) an order requiring the person or industrial association not to carry out a threat made by the person or association, or not to make any further threat; (e) injunctions (including interim injunctions), and any other orders, that the Court thinks necessary to stop the conduct or remedy its effects; (f) any other consequential orders. It has been accepted on both sides that a reversal of the normal onus of proof is effected by s 298V so as to cast on MNL an evidentiary burden of proving, on the balance of probabilities, that its conduct in purporting to accept the repudiation by the owner-drivers of their contracts of engagement was not carried out for the reason, or for reasons that included the reason, proscribed by s 298L(1)(l). Section 298V is in these terms: If: (a) in an application under this Division relating to a person's or an industrial association's conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and (b) for the person or industrial association to carry out the conduct for that reason or with that intent would constitute a contravention of this Part; it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person or industrial association proves otherwise. Mr Tracey, QC who appeared with Mr M McDonald for MNL first submitted that the Court could not find that the TWU, on 28 November, was seeking better industrial conditions for its owner-driver members contracted to MNL. Reference was made to Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 where Northrop J examined s 5(1)(d) of the Conciliation and Arbitration Act 1904 which was a predecessor of s 298L(1)(l) of the Act. In the course of that examination, his Honour said, at 269: One of the chief objectives of any organization of employees is to seek better industrial conditions for its members. The words "an organization which is seeking better industrial conditions" contained in s. 5 (1) (d) do not refer to this general objective but must refer to identified industrial conditions which the organization is seeking to better. To come within this paragraph the employee member must be dissatisfied with the same industrial conditions. The paragraph takes as its subject matter the identified industrial conditions which then form the link between the seeking by the organization to better those conditions and the dissatisfaction by the employee member with those conditions as they then exist. In the present case, the relevant industrial conditions are identified by the informant as the manning requirements at station 1 on the trim line. It is said that the existing conditions require a manning by four operators and that the organization is seeking better conditions by requiring a manning by five operators. Counsel for the informant submitted that the requirement that the organization was seeking better industrial conditions was established by the evidence that the defendant had altered the manning by reducing the number of operators from five to four, had notified the commission of the existence of an industrial dispute relating to that matter and that the organization, by appearing before the commission thereby, at least by implication, was seeking better conditions by seeking a manning by five operators. Support for this submission was sought from the fact that it was Mr. Lane who told Mr. Cahill of the resolution of the five operators that they would not work with a manning by four operators. It was argued that this showed that the organization was acting on behalf of the five operators and thus was seeking better industrial conditions. This submission is untenable. The existing award makes no prescription for manning at station 1. The question of whether there should be five or four operators is a matter for management to determine. Further, I accept the evidence of Mr. Lane that the organization was not making any claim in relation to the number of operators at station 1, nor was it seeking any other conditions relating thereto. The organization had made no application to the commission seeking better industrial conditions in this regard and the commission had not and has not made any finding of a dispute in the matter referred to it - cf. s. 24 of the Act. It follows that the informant has failed to prove that the organization was seeking better industrial conditions and therefore s. 5 (4) does not apply to the circumstances alleged in par. (c) of the charge. Particular reliance was placed on behalf of MNL in the present case on the MOU as precluding a finding that the TWU was thereafter dissatisfied with the industrial conditions of the owner-drivers covered by the MOU. However, it is clear from an examination of the terms of the MOU, in the context of the negotiations, including the meetings of 24 September and 15 October, that it was an interim arrangement providing for immediate or "upfront" payment of a 2˝% increase in remuneration while negotiations continued about the terms on which the balance of the claimed 10% increase (if any) might be extended to owner-drivers. The MOU was, I find, designed to give MNL an assurance that it would not be subjected to any fresh bargaining period or other industrial action in support of the owner-drivers' claims until the continuing negotiations had been concluded, or 30 June 1998, whichever should first occur. The TWU was, I find, through Mr Nash and the owner-driver delegates, actively pursuing the claim for the balance of the increased remuneration and was concerned to restrict, as far as possible, the "trade-offs" or other concessions which MNL was seeking to exact in return for any increase. One focus of that conflict was whether owner-drivers who elected not to become employees or to enter into the contemplated new contracts should be entitled to redundancy payments or other compensation in recognition of accumulated years of service as contractors to MNL. To the time of the meeting of 15 October and thereafter, MNL had been adamant that no such entitlement would be provided for. As recorded in the minutes of the meeting of 15 October, the discussion of cl 14.2(a) of MNL's draft which sought to reserve to MNL an unqualified right to terminate any owner-driver's contract upon 14 days' written notice was inconclusive with Mr Byrne suggesting that the TWU should seek its own advice and the intention was that both sides should have equal rights. In these circumstances, I am satisfied that the TWU was, on 28 November, seeking improved industrial conditions for its owner-driver members engaged by MNL. In my view, "better industrial conditions" in the context of s 298L(1)(l) is a phrase of wide import. It goes beyond existing or proposed contractual terms and extends to an improvement in any of the incidents of an industrial relation or a net improvement in those incidents as a whole. In the present case, the TWU was seeking an improvement in the remuneration of owner-drivers and the owner-drivers were dissatisfied with that incident of their contractual relations and the refusal of MNL to improve it except on terms which involved a worsening of the owner-drivers' ability to preserve their individual contracts or obtain compensation if those contracts were terminated at the instigation of MNL. In that sense, the link to which Northrop J referred between the organization seeking to better some identified existing industrial conditions and the dissatisfaction by the owner-driver members with those conditions has been made out. It was next submitted on behalf of MNL that the evidence established on the balance of probabilities that the alteration of the position of the owner-drivers to their detriment was brought about solely for reasons other than that proscribed by s 298L(1)(l). It was pointed out that the decision to treat the owner-drivers as having terminated their contracts was taken solely by Mr Kasso and in a very short space of time on 28 November after Mr Boucher had directed them to remove their vehicles from the yard and park them outside the gates. In support of that contention, reliance was placed on the fact that company executives including Mr Byrne, Mr Boucher and the Chief Executive Officer, Mr Turner, as well as Mr Kasso, had, at a three day conference at Woodend which had ended only on the afternoon of 27 November, in their examination of possible future restructuring of MNL's operations, formulated a projection which involved the retention of the Campbellfield depot at the expense of another centre of operations and had assumed that owner-drivers at Campbellfield would continue to be remunerated in their existing numbers and at their current rates, including on-costs. Had it been intended, so the argument ran, to dispense with the owner-drivers or to force them on to less advantageous contracts at the first available opportunity, those projections would not have been made at all, or at least would not have been made on the basis that they were. However, the evidence does not suggest that any appreciation was formed at all at the Woodend conference of the implications, or actual or likely repercussions, of the ASU industrial action. In the second place, the figures adopted in Exhibit PP1 to Mr Kasso's affidavit represented, as conceded in cross-examination, "status quo" costs and took no account of any adjustment which might flow from the resolution, in a final way, of the negotiations then in train which I have analysed earlier in these reasons. From the premise that the decision to accept the repudiation by the owner-drivers of their contracts was taken solely by Mr Kasso, I was invited to accept him "as a witness of truth when he said that he did not act for the reason that was alleged but rather acted in the face of customer dissatisfaction of a high order with the fact that the company was not providing them with the service that they had a right to expect at a very important time of the year for retail firms". However, as I pointed out when that submission was made, the circumstances of customer dissatisfaction did not amount to a reason in the sense of a rational explanation for Mr Kasso's decision. They merely provided a background against which the decision was made and against which the probability that it was made for one reason or another has to be tested. Mr Tracey then pointed to the repeated refusal of the owner-drivers to cross the picket line despite requests which began on the afternoon of 27 November culminating with the refusal at about noon on 28 November even to take their trucks out unladen to pick up customers' freight. Those refusals, it was said, reflected a "process" which, against the background already indicated, could readily and rationally be understood as leading to great frustration on Mr Kasso's part. As well as that sense of frustration, it was suggested that there was also acting on Mr Kasso's mind the assumption that the ASU picket was of indefinite duration. That assumption, combined with the perception of growing customer dissatisfaction, made it reasonable, it was submitted, to conclude that there would be no useful work for the owner-drivers in the foreseeable future and that, accordingly, their contracts should be terminated. I am not persuaded that a sense of frustration played any operative part in the decision to terminate the contracts of the owner-drivers. A suggestion akin to that was made by Mr Bell, QC, who appeared with Mr Bromberg for the applicants, in cross-examination of Mr Kasso. Mr Bell asked: I want to suggest to you either ... treating the owner-drivers as having repudiated their terms of engagement was a pretext and you had something else in mind or you lost your head. Mr Kasso emphatically denied having "lost his head". I am satisfied, having had the opportunity to observe him under a searching cross-examination, that he took the decision which he did dispassionately and in what he perceived to be the best interests of MNL. He reiterated: Right, I didn't lose my head. What had occurred was we went through a process, I was satisfied by Mr Boucher, the process that he started on Tuesday, Wednesday, my involvement on Thursday and Friday, we, as an organization had done everything we possibly could for these contract carriers to perform their duties. Based on that and particularly towards the end of Friday when we looked at other options and the other option being for them to unload their vehicles and go out with an empty truck to perform pick-ups because we were still advising our customers at that point that we were still going to perform this service and we had over 800 customers that we had pick-ups; these are casual pick-ups, let alone permanent pick-ups that we had organized. So I didn't lose my head; I thought about it very carefully. That passage provides the source of the submission recounted above that it was the "process" of repeated requests to the owner-drivers to perform their ordinary contractual duties and cross the picket line and their repeated refusals which was the reason for the alteration of their position. However, a powerful combination of factors militates against acceptance of that "process" as the sole reason for the owner-drivers' having been treated as they were. In the first place, the process was far from exhaustive. On the afternoon of 27 November, the company directed its drivers to complete their deliveries but not to pick up any freight so as to avoid a confrontation with the picket on their return. In none of the successive enquiries or requests of owner-drivers as to whether they would carry out their normal duties or cross the picket line, was it unequivocally suggested that a refusal would be accepted as a repudiation of their contracts. The nearest the evidence comes to such a suggestion was the ambiguous statement which Mr Boucher claimed in cross-examination to have made to "the effect that the future relationship of the drivers with Ipec would be in severe jeopardy if they didn't provide the customers with the service ...". Nor was there any attempt to demonstrate, with the assistance of the police or security guards, that vehicles could pass through the picket line without risk of injury or damage to property. It is true that the decision not to institute a trial of that kind may have been justified by a perception that TWU members would not cross the picket line even if it were shown to be completely harmless. However, the failure to dispel what the TWU members claimed were serious occupational health and safety concerns detracts significantly, in my view, from the claim that MNL acted only at the end of a comprehensive but fruitless "process" of requests, instructions and consultations. Similar considerations detract from MNL's reliance on the refusal at about noon on 28 November, deposed to by Mr Boucher, to take out empty vehicles only to pick up customers' freight. There was no attempt to suggest what was to be done with the freight after it had been picked up or what arrangements were proposed for the security of the owner-drivers' vehicles if they returned fully laden to the vicinity of the Campbellfield depot. The claim of exhaustive pursuit of the "process" described by Mr Kasso is also weakened by the failure to explore with the picketers whether they would acquiesce in the "pick up only" proposal. That failure was thrown into sharp relief by Mr Boucher's apparent readiness to accompany Mr Nash in an approach to the picketers until he was dissuaded, or prohibited, by Mr Byrne from taking that course. The only explanation for that action which suggests itself, in the absence of direct attribution of a reason, is that Mr Byrne was anxious to avoid giving any encouragement to the picketers to believe that the company was weakening in its resolve to outlast the picket. However, that explanation, if correct, still detracts from the impression which I was invited to form of a company exhausting every avenue to have productive work resumed. A cognate consideration is the absence, despite Mr Kasso's perception of good relations between ASU and TWU members, of any communication to the picketers that unless owner-drivers broke the picket line they would lose their contracts and, with them, their livelihood. Other matters which have weighed against my accepting the end of an exhaustive process as the reason for MNL's decision include the fact that the same reason could have supported condign treatment of the employee drivers who were no less adamant in their refusal to cross the picket line. It was said of the employee drivers that there remained a prospect that useful work could be found for them although not, it was conceded, on the afternoon of 28 November. However, that prospect, I consider, was only available for a small part of the employed driver workforce as long as the ASU maintained its picket. Similarly, the owner-drivers were offered re-engagement on 2 December when the picket was still in place and there was no indication of a changed attitude to it on the part of owner-drivers. Moreover, the fact that the offer was on different terms, less favourable to the owner-drivers, is not without significance in this context. Similar considerations leave me unpersuaded that the other reason which, it was suggested, informed Mr Kasso's decision either alone or in conjunction with the completion of an exhaustive "process" solely actuated MNL's actions in respect of the owner-drivers. That suggested reason was that the accumulating evidence of loss of custom and the absence of any indication of an end to the picket meant that the amount of useful work available to owner-drivers in the foreseeable future made their retention uneconomical. What makes it unlikely that that chain of circumstances actuated MNL's treatment of its owner-drivers is, first, the absence of evidence of any coherent assessment by the afternoon of 28 November, or even by 30 November when the letters threatening termination were sent out, of the time which MNL would require to recover its lost custom and the extent of that recovery when it occurred. Secondly, such an explanation is inconsistent with the offer to all owner-drivers on 2 December, while the picket was still in place, of re-engagement, albeit on terms which would be somewhat less expensive for MNL. Those terms contain no insistence that newly re-engaged drivers should cross picket lines if directed to do so. It is also difficult to reconcile with the apparent failure to contemplate dismissing, retrenching, or even withholding wages from, any of the employed drivers who, as I have already noted, were no more amenable to crossing the picket line than the owner-drivers. It has to be borne in mind that the termination of the contracts of the owner-drivers, assuming it to have been effected, or the alteration of their position to their prejudice, contemplated by s 298K(2) of the Act did not occur once and for all in the few minutes during which Mr Kasso made his decision at about 2.30pm on 28 November and that decision was conveyed to the owner-drivers. Like any company, MNL is to be taken as having acted for the reasons which commended themselves to those "who represent the directing mind and will of the company and control what it does". See e.g. Tesco Ltd v Nattrass [1972] AC 153 per Lord Reid at 171. In the present case those persons were not confined to Mr Kasso. There was time between his decision and the sending of the letters on 30 November for MNL to repent and revoke Mr Kasso's decision. Although I accept that those letters were probably sent by Mr Boucher on the instructions of Mr Kasso, I infer that Mr Turner had by then become aware of Mr Kasso's decision and had an opportunity, had he wished, to obtain the advice of Mr Byrne about the implications of giving effect to that decision. As well, those letters were cast in less peremptory terms than Mr Boucher's last statement on 28 November. The consequences of refusal to follow "lawful instructions" were conditionally indicated in the sense that they "may result in the termination of your contract of employment." A further opportunity to reconsider how the owner-drivers should be treated occurred between the sending of those letters and Mr Turner's offer on 2 December of re-engagement by Mayne Nickless Courier Services. In these circumstances, the reasons which actuated the company in taking the actions which it did are not to be identified solely by what was present to Mr Kasso's mind at 2.30pm on the afternoon of 28 November. Each of Mr Boucher, Mr Byrne and Mr Turner swore affidavits in these proceedings and was cross-examined. After carefully reviewing their evidence, I am not persuaded, in the light of considerations already outlined, that MNL's actions were motivated solely by the reasons suggested on its behalf. The respondent has failed to exclude the likelihood that it's termination of the owner-drivers' contracts was prompted, in part, by a desire to strengthen its bargaining position in relation to the new owner-driver contracts which had been under discussion since at least August 1997. Because those new contracts were seen as a vehicle for embodying the better industrial conditions which the TWU was seeking for owner-drivers who were dissatisfied with their existing conditions, it follows that the elements of a contravention of s 298L(1)(l) indicated in Heidt v Chrysler have been made out. I was invited by Counsel for MNL, in the event that I should come to the conclusion just indicated, to exercise the discretion conferred by s 298U of the Act by declining to order the re-engagement of the owner-drivers. An exercise of that discretion was said to be appropriate in the light of the huge losses which MNL has sustained since 27 November and the probability that there will be little, if any, useful work available for owner-drivers in the foreseeable future. I acknowledge that, even on the evidence which it has been able to assemble for the expedited hearing of this case, the losses suffered by MNL from the erosion of its customer base have been very substantial. The extent to which MNL can sustain the continuing engagement of some or any of the owner-drivers is a judgment which it must make in the light of its assessment of the time needed to prevent, and then reverse, that erosion. I do not consider that the need to make that assessment constitutes good reasons for exercising the discretion adversely to the applicants in the sense suggested by a Full Court of this Court in Bowling v General Motors-Holden's Pty Ltd (1980) 50 FLR 79 where it was observed, at 94, of the predecessor to s 298L:

The policy and purpose of sub-ss. (1) and (4) of s. 5 is to protect organizations of employees and their representatives from discrimination and victimization by employers. Subsection (5) gives effect to an essential feature of that policy and purpose of s. 5. It is essential that an employer convicted of an offence against the section should not benefit from that offence by ridding itself of an employee by reason of any one or more of the circumstances specified. Accordingly, once the condition precedent has occurred, the court should give a direction to reinstate the employee unless there are good reasons why the employee should not be reinstated, for example if the employee does not desire to be reinstated. In most cases reasons which were relied upon to justify the dismissal of the employee are not really relevant to the exercise of the discretion conferred by s. 5(5), since the conviction of the employer overrides those reasons. What are good reasons will vary from case to case. We have already indicated some but it is impossible to give any exhaustive list. It remains open to MNL to apply to those owner-drivers for whom it is unable to provide sufficient useful work the retrenchment provisions of the existing owner-driver agreement. In the circumstances, I do not consider it an appropriate exercise of the discretion under s 298U to withhold the relief indicated in paragraph (b) of that section. Accordingly, I shall order the respondent to re-engage each of the applicant owner-drivers other than: Laurie Fitzpatrick Robin Rego John Clancy Denis Collis Michael Skillen Giuseppe Garro John Cergol John White Harry Van Tillur Ken Moran Mr Bell has conceded that the last-mentioned applicants cannot be shown to have been in a contractual relationship with MNL. The claim in respect of those applicants is therefore treated as withdrawn. Had I not reached the conclusion just indicated in respect of the claim under Pt XA of the Act, I would have been disposed to make a declaration that the conduct of the applicant owner-drivers on 27 and 28 November did not amount to a repudiation by them of their contracts with MNL. Such a declaration would have been founded on the view that, for reasons indicated above, the company had not made sufficiently clear to the owner-drivers its changed attitude to picket lines for their refusal to be tantamount to a wilful or deliberate flouting of an essential condition of their contracts. That was the test enunciated by Lord Evershed MR in Laws v London Chronicle (Indicator Newspapers Ltd) [1959] 2 All ER 285 at 289 as applied by a Full Court of the Australian Industrial Court in North v Television Corporation Ltd (1976) 11 ALR 599. I have assumed in this part of the discussion that MNL's instruction on 28 November to cross the picket line would otherwise have been reasonable and lawful within cl 14.2(v) of the owner-driver agreement and at common law. However, in view of the conclusions reached in relation to the statutory claim and my earlier examination of the common law claim, it is unnecessary to determine the validity of that assumption. I shall adjourn the further hearing of this application to a date to be fixed for consideration of the question of penalty, compensation and any other consequential orders. Liberty will be reserved to any party to apply on not less than 48 hours' notice in writing to the other parties. I certify that this and the preceding forty (40) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Associate: Dated: 24 December 1997 Counsel for the Applicants: Mr K Bell, QC with Mr M Bromberg

Counsel for the Respondent: Mr R Tracey, QC with Mr M McDonald

Solicitors for the Respondent: Freehill Hollingdale & Page

Date of Hearing: 15, 17, 18, 19 and 22 December 1997