The Transport Workers' Union of New South Wales ("TWU") represents contract carriers engaged in the transportation business conducted by N.S.W. Couriers Pty Ltd t/as Aramex (Sydney) ("Aramex Sydney"). A dispute has arisen between the parties as to deductions that Aramex Sydney applies to the remuneration payable to the contract carriers. The TWU seeks that the Commission make a contract determination to avoid such deductions being made in the future.
Aramex Sydney opposes the Commission making a contract determination in the terms sought by the TWU. It contends that the proceedings ought to be dismissed.
I have determined that it is fair and reasonable to make a contract determination. My reasons follow.
[2]
The Aramex Sydney business
The business conducted by Aramex Sydney, and the arrangements it has in place with the entities moving freight as part of that business, were the subject of consideration by Commissioner Webster in Transport Workers' Union of New South Wales v NSW Couriers Pty Ltd t/a Aramex (Sydney) (2023) 323 IR 1; [2023] NSWIRComm 1013 ("TWU v NSW Couriers"), particularly at [19]-[29] and [60]-[102]. I will not reproduce those passages.
Aramex Sydney led evidence that N.S.W. Couriers Pty Ltd is a wholly-owned subsidiary and franchisee of Australian Couriers Pty Ltd. Both companies were previously part of the Fastway Group. When that Group was acquired by Aramex PJSC in or around 2 February 2016, the branding of the Australian companies was changed to reflect their inclusion in the "Aramex Group".
In broad overview, and relevantly for present purposes, Aramex Sydney operates on a franchise model. Carriers who are described as "Courier Franchisees" (often referred to in the evidence and submissions as "CFs") are required to purchase a "territory". This gives them the right, and obligation, to perform all deliveries and pickups of parcels and other freight to and from Aramex customers in that territory.
As at the date of the hearing of these proceedings, Aramex Sydney had 123 Courier Franchisees.
The terms on which Aramex Sydney contracts with Courier Franchisees are contained in a document titled Courier Franchisee Deed ("CF Deed"). Courier Franchisees are also provided with a document titled "Courier Franchisee Manual" ("CF Manual"), which is defined in cl 1.1 of the CF Deed as being "the operations, procedures and policies manual issued by the Franchisor to the Courier Franchisee in relation to the conduct of the Franchise". Pursuant to cl 2.4(a) of the CF Deed, a Courier Franchisee must "strictly comply" with its obligations under the CF Manual.
[3]
The deductions the subject of these proceedings
The CF Manual provides that "Courier Franchisee remuneration is made up of the total earnings for that territory, less any deductions for that territory". The deductions are described as including, amongst other items, "scanners, depot sort fee, outside hire fees".
The CF Manual further provides that two invoices are produced each week. The first is a recipient created tax invoice which will include "the pickup fees, delivery fees and commission charged by the Courier Franchise [sic] for courier services provided to the Regional Franchisee" (who in this case is Aramex Sydney). The second is described as a "tax invoice from the Regional Franchisee entity to the Courier Franchisee entity for weekly charges such as scanner fees, public liability costs and freight sorting fees".
In simple terms, the amount of the second invoice (that from Aramex Sydney to the Courier Franchisee) is deducted from the first. Any balance is payable to the Courier Franchisee.
It is common ground that Aramex Sydney makes weekly deductions from the earnings of Courier Franchisees for the cost of providing scanners and freight sorting services. The quantum of those deductions are, in the majority of cases, $20 and $70 per week respectively. Aramex Sydney also deducts the cost of engaging "outside hire" to perform work in a territory if the Courier Franchisee is unable or unwilling to do so.
The TWU objects to Aramex Sydney making the deductions. In a document handed up on the first day of the hearing, it described the relief it seeks in the following terms:
"Under Section 313 of the Industrial Relations Act 1996 (NSW), the Industrial Relations Commission of New South Wales makes a Contract Determination in the following terms:
1. This Contract Determination will operate with respect to contracts of carriage between N.S.W Couriers Pty Ltd T/A Aramex (Sydney) (Aramex) and its contract carriers (Carriers).
2. Aramex will not deduct from the remuneration of the Carriers the following:
a. Any amount for the use of scanners;
b. Costs associated with the sorting of freight; and
c. Costs associated with utilising outside hire where the Carrier cannot complete its service requirements.
3. This Contract Determination will operate from 13 November 2023 for a period of 3 years." (Italics and bold in original, tracked changes removed)
It is necessary to examine the nature of each of the deductions that are the subject of the TWU's proposed contract determination.
[4]
Scanners
In a statement relied on by Aramex Sydney, Jason Bovis, its General Manager, stated:
"47. Scanners are a tool of trade which courier businesses (including the courier franchisees of Aramex (Sydney)) need to effectively operate. The scanners perform a range of functions which enable CFs to efficiently operate their businesses, including:
47.1 Identifying their pick ups;
47.2 Enabling parcels to be tracked through scanning events (e.g. onboarding parcels, scanning them to a cage for transport across the network, returning undeliverable parcels, and delivering parcels to their final destination);
47.3 Generating an optimised 'runsheet' for pick ups and deliveries, which a CF can adjust, and which provides for a navigation route consistent with the runsheet;
47.4 Allowing for messaging between CFs and Aramex (Sydney);
47.5 Adding customer details;
47.6 Enabling customers to sign for their parcels;
47.7 Taking a photograph of the parcel having been delivered;
47.8 Designating the 'safe place' at which a parcel has been left; and
47.9 Designating an item as being delivered to a 'hubbed' location.
48. These technical capabilities bring significant efficiencies to the courier businesses which CFs run.
49. Aramex (Sydney) purchases scanners in bulk from an independent supplier and provides CFs with scanners to enable the CFs to conduct their franchise businesses efficiently and effectively."
Under cross-examination, Mr Bovis accepted that scanners were necessary to enable tracking of parcels, and that "tracking is essential to the conduct by Aramex of its courier business". This included the ability to give customers correct information as to where their parcels are at any one time, enabling the Aramex Sydney customer service team to deal with any complaints or inquiries from customers, and better enabling Aramex Sydney to deal with investigations into damaged goods. Mr Bovis accepted that scanning compliance was "absolutely important…for courier franchisees and for Aramex".
In its written outline of submissions, Aramex Sydney described scanners as "specialised pieces of equipment" which are "essential for the CF to operate pursuant to their franchise deed". In its oral submissions, it described scanners as a "critical piece of infrastructure" required by Courier Franchisees to "do their job".
The TWU relied on statements from directors of three Courier Franchisees, namely:
1. Houssam Hamady, the director of Sanyara Pty Ltd;
2. Semra Selbik. In her statement, Ms Selbik described herself as the director of Cencik Pty Ltd. In oral evidence she stated that she had executed a transfer deed to operate through a corporate entity known as Selbik Pty Ltd. It seems relatively uncontroversial that Selbik Pty Ltd took over the territory previously serviced by Cencik Pty Ltd; and
3. Fook Wong, the owner of Successful Enterprises Pty Ltd.
Each of these witnesses gave evidence to the effect that the use of a scanner, as provided by Aramex Sydney, was necessary for them to perform their work and for them to be paid for that work.
Despite describing scanners as "essential" and "critical" to the work of Courier Franchisees, Aramex Sydney contended that the use of scanners was not mandatory. In his statement, Mr Bovis gave evidence that as far as he was aware, Aramex Sydney had not mandated the use of scanners by Courier Franchisees. He gave evidence of "MobileSTAR", which he described as "an application that can be downloaded to any smart phone [which] allows CFs to complete all their scanner functions from [their] phone". He stated that "CFs…across the country use this application".
However, Mr Bovis also gave evidence of the limitations of using a mobile phone application in place of the scanner. He stated that, in his view, a "mobile phone with camera to facilitate scanning is not a fit-for-purpose alternative to using a scanner" and set out his reasons for coming to that view. He further stated that the use of the MobileSTAR application "has a number of hurdles…which can cause significant disruptions to the network". He described it as being Aramex Sydney's "preference" that Courier Franchisees use scanners.
In its written outline of submissions, Aramex Sydney submitted:
"49. Notwithstanding the inefficiencies that may exist with the use of alternatives, there is nothing preventing CF's [sic] from doing so. It is entirely up to the CF what platform they use."
In light of the totality of Mr Bovis's evidence, this submission needs to be approached with caution. In addition, I note the following:
1. At items 5.1 and 7.5 of the CF Manual, a scanner is described as "the key piece of technology" that allows a Courier Franchisee to conduct its business.
2. At item 5.2 of the CF Manual, the MobileSTAR application is referred to under the heading "If your scanner fails".
3. Mr Bovis gave evidence that prior to entering into a CF Deed, prospective Courier Franchisees are provided with a document titled "Disclosure Document". At item 10.1 of that document, a scanner is described as being a "mandatory" requirement.
4. In her statement, Ms Selbik deposed that she could not recall Aramex Sydney providing her with an alternative way to complete her work that did not rely on the use of a scanner.
I am not persuaded that the use of scanners is, or would be perceived by Courier Franchisees engaged by Aramex Sydney as being, truly or practically optional.
Mr Bovis also gave evidence as to the costs of scanners, including the initial purchase of the scanner and ongoing costs, such as IT support and insurance. He stated that the amounts paid by Courier Franchisees did "not nearly recover" the costs incurred by Aramex Sydney. Under cross-examination he accepted, "to a degree", that the purpose of the deductions for scanners was to help Aramex Sydney cover the cost of the scanners.
However, also under cross-examination, Mr Bovis accepted that he was not aware of any calculations or assessments having been done "as to how much a scanner actually costs Aramex on a per annum basis". He conceded that he did not know "one way or the other" whether the annual amount paid by a Courier Franchisee was more or less than "what a scanner is actually worth on a per annum basis".
Mr Hamady stated that he had been given a scanner when he commenced working in the business then operated by Fastway Pty Ltd, which had been replaced with a new one when Aramex took over that business. There was no suggestion that he had ever requested or required a replacement scanner. Mr Hamady stated that he had calculated that his business had paid more than $7,000 in fees for the use of the scanner since 2016. This has to be seen in light of Mr Bovis's evidence that the "costs associated with the purchase of scanners by Aramex (Sydney)", not including shipping from the supplier to Aramex Sydney and the costs of any ongoing support services, are less than $2,500.
It is also relevant to observe that it was uncontroversial that scanners at all times remain the property of Aramex Sydney, and must be returned by a Courier Franchisee if their contract terminates for any reason.
[5]
Freight sorting
Aramex Sydney makes a weekly deduction of $70 from the earnings of Courier Franchisees for what is described on the invoices as "Freight Sort". Mr Bovis accepted under cross-examination that the purpose of the deduction was to assist Aramex Sydney to recoup some of the costs it incurs in sorting freight.
As there was little contest on the evidence regarding the sortation of freight, it is convenient to reproduce the following extracts from Mr Bovis's statement:
"32. CFs run their own franchise businesses. Franchise businesses (in addition to picking up and delivering freight), are required to sort the freight which they carry.
33. Aramex (Sydney) provides CFs with significant and ongoing assistance in freight sorting. The $70 per week freight sorting fee is far less than the amount it costs Aramex (Sydney) to sort freight.
33. Aramex (Sydney) engages external labour hire to conduct freight sorting for the benefit of CFs.
…
36. Additionally, the automation system at Aramex (Sydney)'s depot in Chullora, cost Aramex (Sydney) roughly $9 million AUD to have installed.
…
39. In relation to the sorting work CFs perform, the CFs are only required to feed their conveyable freight onto the automation (that is, they load parcels which meet the size restrictions and shape for automation on to the conveyor belt) and conduct a primary sort of their non-conveyable pickups (moving parcels from their vehicle into cages for designated areas in the 'bull pen').
40. Previously, CFs would need to sort all of their small parcels (conveyable items suitable for automation) manually, which represents over 80% of the volume picked up by CFs. The CFs also assisted in sorting the inbound freight that arrived from other branches in the morning for same day delivery and no longer perform this task at all. This isn't required of CFs (and is no longer possible anymore apart from them sorting their non-conveyable pick-ups when they return to the depot) on account of the automation. Aramex (Sydney) performs the more difficult and time consuming secondary sort. Aramex (Sydney) also provides CFs with the following freight sorting services:
40.1 Performing a primary sort by feeding conveyable international freight, interbranch freight and bulk injection freight onto the automation to sort to courier runs. This is the majority of freight.
40.2 Performing a secondary sort from automation chute to CF trolley and interbranch cage for all conveyable freight put on the automation from international, interbranch, bulk injection and courier pickups;
40.3 Performing a manual primary sort for non-conveyable freight (approximately 25% of all volume) international freight, interbranch freight and bulk injection freight. (The only primary sort Aramex (Sydney) doesn't do is non-conveyable freight picked up by CFs);
40.4 Performing a secondary sort of non-conveyable freight from primary sorted cages direct to CF runs for all inbound volumes, including the non-conveyable CF picks identified in 40.3 above;
40.5 Performing a secondary sort into the CF trolleys for delivery the next day. This is a result of CFs not taking all their freight out and servicing their exclusive territory as required; and
40.6 Consolidating non-conveyable freight left behind by the CFs (in the morning) into cages so Aramex (Sydney) has a scan for visibility on what was left behind and can't be covered by a sweeper fleet after CFs have departed the depot.
…
42. CFs now spend considerably less time sorting freight than they have previously done. …"
In his statement, Mr Wong gave the following evidence:
"17. When I first purchased the Run, the freight sorting fee was $45 or $50. About 6 or 7 years ago, it was increased to $70. I don't know why it was increased but I did not have any choice in this. Aramex just increased this fee."
[6]
Outside hire
Clause 2.5 of the CF Deed provides as follows:
"2.5 Non-compliance
If the Courier Franchisee fails to meet and maintain its obligations under the Courier Franchisee Manual including failing to provide sufficient Courier Vehicles to service the Exclusive Territory, or pick up and deliver freight within the Franchisor's expected timeframes, the Franchisor may in its absolute discretion enter into other Courier Franchise Deeds or make other temporary or permanent arrangements in relation to the provision of courier services in the Exclusive Territory to ensure that the Exclusive Territory is serviced to the standard contemplated by the Courier Franchisee Manual subject to the terms of any other Courier Franchise Deeds granted in relation to the Exclusive Territory to that time. Any such arrangements will be at the Courier Franchisee's sole cost and any failure to pay such costs will constitute a debt owed by the Courier Franchisee to the Franchisor."
These terms are reflected also at item 3.9 of the CF Manual, which is titled "Outside hire" and which includes the following:
"It is your responsibility to cover all pickups and deliveries within your exclusive territory.
If you cannot properly or effectively service your exclusive territory in accordance with the Deed, the Franchisor may, in order to satisfy its obligations under Clause 2.2 (b) of the Deed, use outside hire to service the franchise.
The Franchisor may deduct the cost of the outside hire from your remuneration."
The "temporary arrangements" that Aramex Sydney might make pursuant to cl 2.5 of the CF Deed involve arranging for alternative labour to perform pickups and deliveries that the Courier Franchisee cannot, or will not, perform. That labour is either in the form of a "Blu Courier" or "outside hire".
In his statement, Mr Bovis described "Blu Couriers" (or "Blus", as they were otherwise referred to in the evidence and submissions) as a "crowd-sourced delivery solution". He said that they are part of a network set up by Australian Couriers Pty Ltd "to assist with addressing temporary spikes in demand". On my understanding, Blu Couriers are akin to "gig" workers, who make themselves available through a platform managed by Aramex to perform ad hoc delivery work.
Mr Bovis described "outside hire" (often referred to in the evidence and submissions as "OSH") as "independent third parties". I understand them to be independent transport businesses which are contracted by Aramex Sydney to carry out pickups and deliveries of parcels.
A curious feature of the invoicing arrangements between Aramex Sydney and its Courier Franchisees is that the Courier Franchisee is notionally credited with the earnings it would have received for any parcel delivered by a Blu Courier, or picked up and delivered by outside hire, as if the Courier Franchisee had performed that work. The amount that is paid by Aramex Sydney to the Blu Courier or outside hire - which is usually calculated at a rate per parcel - is then deducted from the amount notionally "payable" by Aramex Sydney to the Courier Franchisee.
It was common ground that the amount per parcel paid to a Courier Franchisee is now the same as that paid to a Blu Courier. This appears not to have been the case at the time the witnesses' statements were prepared. The "net effect" for the Courier Franchisee of the use of a Blu Courier is, therefore, zero. It is for this reason that the TWU's proposed contract determination does not seek any restraints on deductions being made by Aramex Sydney as a result of the use of Blu Couriers. I observe that in the absence of this apparent change in arrangements, I would not have seen a need to distinguish between Blu Couriers and "outside hire", at least in so far as a Blu Courier is engaged by or at the initiative of Aramex Sydney.
The situation with outside hire is different. The evidence is that the amount paid by Aramex Sydney to outside hire tends to be higher than the parcel rates paid to Courier Franchisees. It follows that each parcel delivered for or in place of a Courier Franchisee comes at a cost to that Courier Franchisee.
It is this cost which is at the heart of the grievances in the written evidence of the TWU's witnesses. I note in particular that:
1. Ms Selbik stated that she "stands to lose money" when outside hire is used, that the deductions have a significant effect on her company's ability to operate profitably, that the charges for outside hire are unpredictable and often made without her knowledge or consent, and that she has no control over when she will "encounter" the deductions;
2. Mr Wong deposed that he has not had a holiday in 20 years as he is "worried about the fees Aramex would charge [him] for outside hire"; and
3. Mr Hamady stated that the rate paid by Aramex Sydney to outside hire is "much higher than the rate paid to Sanyara Pty Ltd". I observe that under cross-examination, Mr Hamady accepted that his "main complaint" was not the fact that outside hire may be engaged, but rather how much is charged for the outside hire.
In his statement, Mr Bovis deposed:
"20. If a CF is failing to service their exclusive territory, Aramex (Sydney) is bound by the CF Deeds to intervene to ensure that the territory is serviced, because the Aramex network throughout Australia (and internationally) depends upon efficient pick ups and deliveries throughout the whole network. For context, the deliveries performed in Sydney come from other CF exclusive territories from around the entire country.
…
75. OSH are engaged by Aramex (Sydney) on behalf of CFs when a CF has failed to meet their pick up and delivery obligations pursuant to the CF Deed (e.g. absenteeism or freight being left behind by a CF which the CF was required to ensure was delivered that day), and also in company-owned territories. If Aramex (Sydney) did not intervene, the freight would remain undelivered by the CF, and the breach by the CF of their pick up and delivery obligations would impact the Aramex network.
76. By engaging OSH on behalf of a CF in their exclusive territory, Aramex (Sydney) prevents the CF's failure to meet its obligations under the CF Deed from causing damage to Aramex (Sydney) and other third parties in the Aramex network.
77. If Aramex (Sydney) could not 'cure' the breach by obtaining an alternative means of delivery at the CF's cost, Aramex (Sydney) will need to address the breaches by CFs by alternative measures.
78. I anticipate that this would mean taking action in response to the CF's breach of their CF Deed, in accordance with the CF Deed.
79. Aramex (Sydney) does not always enforce its right to charge CFs for the use of OSH in circumstances where CFs have not complied with their obligations under their CF Deed. Aramex (Sydney) does not typically charge for OSH where Aramex (Sydney) has determined that there is too much volume for the CF to reasonably service the territory in the short term, where the CF has ensured they have taken aged and priority freight, or if the CF cannot fit the amount of freight in their vehicle (although, if this issue persists, the CF may be expected to address their capacity constraints).
80. In practice, the rates paid to OSH are not sustainable for Aramex (Sydney). …"
As to the rates paid to outside hire, Mr Bovis gave the following evidence under cross-examination:
"Q. You gave some evidence earlier to Mr Guy that outside hire was now $3.35 per parcel. Have I understood that correctly?
A. The majority are, yes.
Q. And that was a rate which was proposed by Aramex to the outside hire providers Aramex engages?
A. Yes.
Q. And some of them accepted it, some of them haven't?
A. Yes.
Q. The rate that outside hire is paid is a rate that is determined at all times by Aramex, correct?
A. Yes.
Q. And Aramex is responsible for paying that rate to outside hire?
A. Yes."
Mr Bovis gave the following further evidence under cross-examination:
"Q. You used the expression 'unlikely to pass the loss on', does that mean that even if, for whatever reason, their van's full and they physically can't take the goods, there might be a circumstances where you would impose the deduction?
A. I'm not aware of any in my time where we have. It's one of the rules I've put in place with the guys, that if they're doing the right thing and doing all they can, then I don't believe we should pass that cost on.
Q. Right?
A. But if they're going out with minimal deliveries and, you know, we roughly know what couriers can do in their various territories. If they're just looking to have an easy day or of the like [sic], we probably would pass it on because we believe they could have done it.
Q. Is it a fair summary of what you've just told us, sir, to say that it depends ultimately on your view about how the couriers is performing the work and whether they're doing the best that they can in the circumstances?
A. Yeah, based on the capacity in their vehicle. And if that was to continue beyond, you know, a reasonable time, say a week or two, we expect the courier to either get a bigger van or make alternative arrangements for [an] authorised driver. If they weren't to do that, they'd likely incur the costs to service their exclusive territory.
Q. So, outside hire could be engaged by Aramex for instance where a courier franchisee is ill and can't perform, pick up some deliveries and is unable to find an alternate driver?
A. Yes.
Q. And in that situation, as I understand your evidence, you would charge the courier franchisee?
A. Yes.
Q. For the cost of the outside hire?
A. Yes.
Q. Without question?
A. Yes.
…
Q. Now, if a contract carrier engaged by Aramex took annual leave but they were unable to find an alternate driver to do pick up and deliveries, would they be charged outside hire?
GUY: Oh, I--
WITNESS: Yes. Sorry.
BONCARDO: 'Yes' is the answer to my question."
[7]
The Initial Franchise Fee
In order to "purchase" a run from Aramex Sydney, a prospective Courier Franchisee must pay an "initial franchise fee". Mr Bovis accepted that this is a "minimum requirement" for working as a Courier Franchisee for Aramex Sydney. The amount of the initial franchise fee varies from run to run.
Each of the Courier Franchisees from whom the TWU called evidence deposed as to having paid an initial franchise fee. Sanyara Pty Ltd paid $44,000 in 2016 and Cencik Pty Ltd paid $23,000 in 2017. In 2006 Successful Enterprises Pty Ltd paid $45,000 to purchase a run from another company, which was at that time providing courier services to Fastway Pty Ltd.
Under cross-examination, Mr Bovis was unable to explain what use Aramex Sydney made of the initial franchise fee.
[8]
The TWU
There are two broad limbs to the case advanced by the TWU.
First, the TWU contends that the deductions are contrary to s 118 of the Industrial Relations Act 1996 ("Act"), or in the alternative, to s 119 of the Act, rendering them unlawful. It follows, in the TWU's submission, that "it will be axiomatically fair and reasonable to make a contract determination which requires Aramex to cease making what are unlawful deductions".
Second, and in the alternative, the TWU argues that the deductions are neither fair nor reasonable in that:
1. they do not appear congruent with any costs actually incurred by Aramex Sydney in facilitating the performance of its transport business;
2. they are costs which should be borne by Aramex Sydney as the principal contractor;
3. the deductions are industrially unfair and unconscionable, "[g]iven the exorbitant amounts Aramex requires carriers to pay to have the privilege of working for it"; and
4. the deductions undermine the capacity of the carriers to achieve cost recovery and operate profitable businesses.
In its opening submissions at the hearing, the TWU summarised its case in respect of the deductions as follows:
"The scanners are and the evidence, we say, will demonstrate an integral part of the principle contractors [sic] system, and the way that it conducts its business and enable it to, amongst other things, track the location of every single parcel in its system, and monitor the performance of work by each of the contract carriers, and the contract carriers have no real or practical choice but to use the scanners provided to them by Aramex which scanners remain the property of Aramex.
In respect to sorting, so far as can be discerned from the respondent's case, the sorting fee apparently relates to the sorting of freight by labour hire employees engaged by a labour hire company that the respondent engages to provide labour to its Chullora depot, and to defray costs it has incurred on the evidence of Mr Bovis, in installing an automated system, and those are costs, that, with respect to the respondent, are costs of a [principal] contractor in the course of running a courier business. They are not costs which, in our respectful submission, are legitimate business costs of contract carriers who are performing and are engaged to perform contracts of carriage.
The outside hire costs which are deducted are also not legitimate business costs in our respectful submission for the contract carriers to bear, as appears from Mr Bovis's evidence, it is Aramex that engages the outside hire and it is Aramex who pays and derives the benefit of the services provided by outside hire, and seeks to defray its costs in that respect by charging - by way of deduction [of] an amount, or amounts, for outside hire on the contract carriers."
[9]
Aramex Sydney
The case advanced by Aramex Sydney can similarly be reduced to a few broad propositions.
First, in its written outline of submissions, Aramex Sydney contended that its "primary position" was that the proposed contract determination should not be made because the TWU had not presented any evidence from a Courier Franchisee which would be covered by it. It argued that none of the entities from whom the TWU called evidence was a contract carrier within the meaning of Ch 6 of the Act. It was said, consequentially, that there was "no utility" in the Commission making the proposed determination.
Although Aramex Sydney referred in its submissions to the proposed contract determination lacking "utility", I do not consider that to properly reflect the arguments advanced. The company's position is better to be understood as contending that in the absence of evidence from a Courier Franchisee which is a contract carrier within the meaning of Ch 6 of the Act, the case for the Commission's intervention to make a contract determination has not been made out.
Second, and in the alternative, Aramex Sydney submitted that the deductions relate to expenses which Courier Franchisees must incur in running their businesses. It was consequently justified and reasonable that they pay for those expenses by way of the deductions made by Aramex Sydney. Its position was well summarised in the following passages in its written outline of submissions:
"40. In considering the present matter, the correct approach is therefore to recognise that the CF's to which any contract determination may apply, are independent contractors who take their own chances of profit and risk of loss. They run their own businesses and must, as any business owner does, bear the cost of their business expenses.
41. Put in the simplest of terms, CF's that are contract carriers, being independent contractors must bear the cost of their business expenses. The cost of and deductions for scanners, freight sorting and the use of [outside hire] …are business expenses no different to that of tyres, fuel, maintenance, and registration of which there is no dispute the carriers must pay for.
42. By making a determination that exempts contract carriers from deductions for scanners, OSH and Blu Couriers, and freight sorting, the Commission will create a relationship between the parties that is unfair and not industrially sound. The TWU's applications seek to move the legitimate business expenses of contract carriers on to their principal contractor. A circumstance that is wholly unsatisfactory and undermines the very purpose of the contract carrier/principal contractor relationship."
Aramex Sydney also submitted:
"26. The practical reality of exercising the discretion to make a determination or not is however, one that is not taken lightly. As part of exercising the discretion in the present matter, the Commission should also take into account that:
a. the making of a determination would create a new remedy on top of the existing section 118 and 119 provisions that is not needed;
b. none of the persons giving evidence in the TWU's case are contract carriers; and
c. there are presently contract determinations already in place that deal with the same subject matter. In particular, in both the General Carriers Contract Determination and the Courier and Taxi Truck Determination."
Finally, Aramex Sydney submitted that, were the Commission to be satisfied that a contract determination ought to be made, then in light of the evidence it should be limited in its scope to Courier Franchisees which are contract carriers. It should not extend to the category of carriers known as "Courier Lites".
It is not necessary for present purposes to explore what is meant by a "Courier Lite" and how they fit within the business conducted by Aramex Sydney. I confine myself to referring to TWU v NSW Couriers at [20]-[21]. Mr Bovis gave uncontroverted evidence that "[t]here are no existing Courier Lites engaged by Aramex (Sydney)".
[10]
Relevant law and principles
Pursuant to s 313(1) of the Act, the Commission is empowered to inquire into any matter arising under contracts of carriage and to make a contract determination with respect to remuneration of the carrier, and any condition, under such a contract. The term "contract of carriage" is defined in the Act as follows:
309 Contract of carriage - meaning
(1) For the purposes of this Chapter, a contract of carriage is a contract (whether written or oral or partly written and partly oral) for the transportation of goods by means of a motor vehicle or bicycle in the course of a business of transporting goods of that kind by motor vehicle or bicycle, but only -
(a) where the carrier is not a partnership or body corporate - if no person except the carrier is, except in the prescribed circumstances, employed (whether pursuant to a contract of employment or not and whether by the carrier or not) in driving or riding on that or any other motor vehicle or bicycle in the course of that business, or
(b) where the carrier is a partnership - if no person other than a partner is, except in the prescribed circumstances, employed (whether pursuant to a contract of employment or not and whether by the partnership or not) in driving or riding on that or any other motor vehicle or bicycle in the course of that business, or
(c) where the carrier is a body corporate - if no person is, except in the prescribed circumstances, employed (whether pursuant to a contract of employment or not and whether by the body corporate or not) in driving or riding on that or any other motor vehicle or bicycle in the course of that business unless the person is -
(i) a director of the body corporate or a member of the family of a director of the body corporate, or
(ii) a person who, together with the members of his or her family, has a controlling interest in the body corporate, or
(iii) a member of the family of a person who, together with the members of his or her family, has a controlling interest in the body corporate.
(2) For the purposes of subsection (1), a reference to a carrier includes a carrier carrying on business under a franchise or other arrangement.
…
I digress to deal with a matter of clarification. In their written and oral submissions, the parties in these proceedings used the term "contract carriers". That term appears in the Act, in the context of multiple references to "an association of contract carriers". The Act does not, however, define "contract carrier". To my mind, it is tolerably clear that a reference to a "contract carrier" is one to a carrier engaged under a contract of carriage, as defined in s 309. Where the term is used in this decision, it should be read as having that meaning.
Section 315 of the Act provides that when an application is made for the Commission to make a contract determination, it must conduct a conference at which it is to, amongst other things, "take all reasonable steps to effect an amicable settlement of any matters in dispute". It is not controversial that this requirement has been met: Commissioner O'Sullivan convened conferences with the parties on 28 November 2023 and 6 December 2023.
In exercising its functions under the Act, the Commission must take into account the public interest and, for that purpose, must have regard to, amongst other things, the objects of the Act: s 146(2). Those objects are contained at s 3 of the Act, which relevantly provides:
3 Objects
The objects of this Act are as follows -
(a) to provide a framework for the conduct of industrial relations that is fair and just,
(b) to promote efficiency and productivity in the economy of the State,
…
(e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments,
…
(h) to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations,
…
In Transport Industry - General Carriers Contract Determination [2016] NSWIRComm 3, Kite AJ (as he then was) observed:
"30. A number of parties made reference to the decision of Haylen J in Transport Industry - General Carriers Contract Determination Application by Australian Road Transport Industrial Organisation, New South Wales Branch for removal of Special Fuel Price Surcharge [2010] NSWIRComm 133 ('Special Fuel Price Surcharge Case'). In that matter his Honour stated at [16]:
There was no dispute between the parties that there was a general and wide discretion provided by s 320 of the Act to vary a Determination. It was broadly accepted that, in exercising that power to vary a Determination, the Commission may be guided by similar considerations contained within s 10 and s 17, namely, that the Determination should set fair and reasonable rates and that in making a variation, the public interest is to be considered provided there is a substantial reason for making the variation.
…
34. It has long been recognized that Industrial Tribunals are in a different position to the general courts. The duty of the Commission is to make an award or determination which prescribes fair and reasonable rates and conditions. In doing so the Commission is not bound by the rules of evidence or to act in a formal manner but 'is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.' See s 163 (1)(c) of the Act.
35. The various authorities referring to the 'onus' [borne] by a party are to be understood in that context. There must be information before the Commission which allows it to be satisfied that the determination or award, if made, will provide just and reasonable rates and conditions. The assessment of the adequacy of that material will vary according to the nature of the case, including the degree of consent, before the Commission: see In re Butchers, Wholesale (Cumberland) Award 1971 AR 425 especially at 437- 440.
36. I intend to approach the matter in that light." (Emphasis in original)
In Transport Industry - General Carriers Contract Determination 2017 [2017] NSWIRComm 1013 ("TI - GCCD 2017") Newall C:
1. accepted as correct the proposition derived from Transport Industry - General Carriers Contract Determination Application by Australian Road Transport Industrial Organisation, New South Wales Branch for removal of Special Fuel Price Surcharge [2010] NSWIRComm 133 that in exercising the power to vary a contract determination the Commission may be guided by similar considerations to those arising in respect of ss 10 and 17 of the Act: at [12]; and
2. observed that, like an award, a contract determination ought to set fair and reasonable rates. The overarching duty of the Commission when it is dealing with the setting of rates and conditions is that it must make rates and conditions which are fair and reasonable: see [12] and [16].
[11]
Aramex Sydney's "utility" argument
As stated above, Aramex Sydney's "primary position" was that the proposed contract determination should not be made as there was no evidence from a Courier Franchisee which would be covered by it. The key premise of the contention was that that none of the entities from whom the TWU called evidence was a contract carrier.
In TWU v NSW Couriers at [126], Commissioner Webster concluded that a contract of carriage within the meaning of s 309(1) of the Act existed between Courier Franchisees and Aramex Sydney, and that Aramex Sydney is a "principal contractor" within the meaning of s 310 of the Act. That decision was not the subject of appeal and its correctness was not challenged before me.
To the contrary, in its written outline of submissions, Aramex Sydney submitted that as a result of Commissioner Webster's decision, the matter of jurisdiction was "settled" and that "there is no doubt that the relationship between [Courier Franchisees] and Aramex Sydney is one of a contract of carriage provided [the Courier Franchisees] meet the legislative requirements of such a relationship as outlined in section 309 of the IR Act".
The "utility" argument advanced by Aramex Sydney was that none of the Courier Franchisees from whom the TWU called evidence met those legislative requirements. It submitted that Sanyara Pty Ltd and Selbik Pty Ltd "regularly utilise Blu Couriers to perform work for and on behalf their enterprises", while Successful Enterprises Pty Ltd "for an extended period…heavily utilised Blu Couriers and additional drivers to service their run". This was said to take each company outside the definition of "contract of carriage", having regard to the terms of s 309(1)(c) of the Act.
Aramex Sydney relied on evidence from Mr Bovis to the effect that:
1. Sanyara Ptd Ltd had allocated work to Blu Couriers on 23 occasions between May 2022 and January 2024;
2. Aramex Sydney "allocates excess freight which Selbik Pty Ltd has failed to deliver to Blus when they are available"; and
3. Successful Enterprises Pty Ltd "has historically heavily utilised Blus", observing that in 2019 the company "allocated around 3,542 parcels to Blu[s]".
There are three observations to make. First, the utilisation by a Courier Franchisee of Blu Couriers, or any other form of labour, is not of itself sufficient to conclude that the Courier Franchisee cannot be a contract carrier. Section 309(1)(c) of the Act anticipates that third party labour can be used in "the prescribed circumstances", without affecting the carrier's status. By cl 34(1)(a) of the Industrial Relations (General) Regulation 2020, the prescribed circumstances include the employment of a person "to temporarily take the place of a person directly involved in the business who is sick, on annual leave or otherwise temporarily unavailable".
Second, the premise of Aramex Sydney's position in respect of Selbik Pty Ltd is that the company ceases to be a carrier under a contract of carriage as a result of Aramex Sydney engaging Blu Couriers to perform deliveries that Selbik Pty Ltd had not completed. I have a great deal of difficulty accepting the proposition that an entity could avoid the creation of a contract of carriage, and hence regulation under Ch 6 of the Act, by arranging for third parties to perform cartage work that would otherwise be performed by a carrier, potentially even without the carrier's knowledge or consent.
Third, and in a related manner, the evidence raises doubts as to whether a Blu Courier engaged by Aramex Sydney is, to use the language of s 309(1)(c) of the Act, "employed…in the course of [the Courier Franchisee's] business". The relationship, certainly when the Blu Courier is engaged by Aramex Sydney, seems to be between those parties, not between the Blu Courier and the Courier Franchisee. This is borne out by the evidence given under cross-examination by Mr Bovis that "it's Aramex who sets the Blu Courier fee". Further, Mr Bovis had the following exchange with counsel for the TWU:
"Q. I think you'd answered my question that a Blu Courier applies via a website set up by Aramex to become a Blu Courier?
A. Yes.
Q. They complete an online application form?
A. Yes.
Q. A Blu Courier manager then contacts them?
A. Yes.
Q. They're on-boarded by Aramex?
A. Yes.
Q. They're trained by Aramex?
A. Yes.
Q. They're inducted into Aramex's systems by Aramex?
A. Yes.
Q. They have an application on their mobile phones, don't they--
A. They do.
Q. --that they use?
A. They do, yes.
Q. And they're able to log onto that application and accept deliveries, correct?
A. Yes.
Q. That application is one which has been designed by Aramex?
A. Yes.
Q. And they're able to accept and reject work via that application?
A. Yes.
Q. If they accept work, they will collect deliveries from a location nominated by the application?
A. Yes.
Q. That location could be the Chullora depot, it could be somewhere else, correct?
A. Yes.
Q. And they pick up parcels?
A. Yes.
Q. And they then deliver them to the addresses set out in the application, correct?
A. Yes.
…
Q. Now, Aramex expects Blu Couriers to deliver the parcels they've accepted for delivery, correct?
A. Yes.
Q. Aramex expects that if a Blu Courier is unable to make a delivery, they return the parcels to Aramex or re-attempt delivery?
A. Yes.
Q. Blu Couriers are paid by Aramex on a 'per parcel' basis?
A. Yes.
Q. They're paid weekly in arrears by Aramex?
A. Yes.
Q. When a courier franchisee decides, for whatever reason, they can't deliver certain parcels, they allocate those parcels on their scanner to Blu Couriers?
A. Yes, can't or won't, yes.
Q. And by a means that's entirely controlled by Aramex those potential parcel deliveries pop up on a mobile phone application of a Blu Courier who can select to make those deliveries?
A. Yeah, so they're grouped by the CF when they scan into the portal, so the Blu Courier selects a group which might be 40 parcels, usually the minimum, and it's basically they log on, they accept that run, then they'll come in and collect those parcels.
Q. Alternatively, from time to time a courier franchisee will give their regional franchise manager parcels that they cannot, for whatever reason, deliver and the regional franchise manager will allocate them to a Blu Courier for delivery?
A. That's generally not the case.
Q. But it does happen?
A. I'm not too aware of it happening where they give them to us to deliver to them, scan it to the portal, we've had cases with Cencik where she left them behind, intentionally, and that was the cheapest volume you can deliver.
Q. When a courier franchisee allocates parcels to Blu Couriers, they don't know and cannot know which particular Blu Courier will deliver the parcels?
A. No, not if they're following the process."
In relation to the observation at [69] above, Aramex Sydney led no evidence as to the circumstances in which Sanyara Pty Ltd or Successful Enterprises Pty Ltd engaged Blu Couriers. It asks, in effect, that the Commission assume or infer that any engagement was not in a "prescribed circumstance".
Mr Wong gave evidence that in July 2019 he had to take time off work as a result of surgery to remove his appendix. One could easily infer that this was a "temporary unavailability". There is little evidence to suggest that the use of Blu Couriers has continued, and if so in what circumstances. Under cross-examination, Mr Wong confirmed that he had never had another driver on his run.
Aramex Sydney has failed to persuade me that Sanyara Pty Ltd or Successful Enterprises Pty Ltd are not contract carriers. This is sufficient to dispose of its "primary position", without needing to express a concluded view on the second and third observations referred to at [70]-[71] above. That said, I note one further matter.
As I have previously remarked, Aramex Sydney did not challenge the correctness of TWU v NSW Couriers. Unlike the position it took in that case, Aramex Sydney raised no jurisdictional objection to the Commission making the contract determination sought by the TWU in these proceedings. To the contrary, it described the question of jurisdiction as having been "settled". As the TWU submitted in its closing oral submissions, "[it] doesn't appear in dispute, because there's been no jurisdictional objection, that some of the carriers engaged by Aramex at least, even accepted by Aramex, are contract carriers".
I am prepared to draw the inference that at least some of the 123 Courier Franchisees engaged by Aramex Sydney are contract carriers. It follows that even were I to have been persuaded that none of Sanyara Pty Ltd, Selbik Pty Ltd or Successful Enterprises Pty Ltd are contract carriers, it would not have sufficed for me to dismiss the matter.
[12]
TWU's reliance on alleged breaches of sections 118 and 119 of the Act
One of the bases on which the TWU relied was the contention that the disputed deductions are contrary to ss 118 and 119 of the Act. The TWU submitted that if this contention were correct, the deductions would necessarily be unfair and unreasonable on the basis that they were unlawful, which would support the Commission making the proposed contract determination.
For the reasons which follow, and the conclusions that I have reached, it is not necessary for me to traverse the arguments advanced by the parties in relation to this issue.
[13]
Relationship between Aramex Sydney and the Courier Franchisees
[14]
The case presented by Aramex Sydney
Despite there being no challenge to the correctness of TWU v NSW Couriers, the case presented by Aramex Sydney did not reflect a full appreciation or acceptance of Commissioner Webster's decision. Throughout his statement, Mr Bovis emphasised the fact that Courier Franchisees are, indeed, franchisees which operate their own businesses, purportedly separate to that of Aramex Sydney. For example, he stated:
"14. CFs do not perform work for Aramex (Sydney). They elect to purchase the right to an exclusive territory, consistent with their CF Deed, and run a courier business within that territory. CFs are granted to the exclusion of Aramex (Sydney) and others a licence to establish and operate the Franchise in their exclusive territory, consistent with clause 2.1 of the CF Deed. Territories may be purchased from Aramex (Sydney), or from an existing CF, in accordance with the terms of that existing CF's CF Deed.
15. CFs are required to service their exclusive territory, which broadly means they must fulfil all their obligations regarding deliveries and pickups within their exclusive territory. All pick ups and deliveries which arise in that exclusive territory are the responsibility of the CF. To the extent the authorised driver of a CF is unwell, on leave, or otherwise unavailable, the CF is expected to make alternative arrangements to ensure it meets its obligations to service its exclusive territory in accordance with its CF Deed.
16. Aramex (Sydney) expects a CF to meet the demand in their business…
…
21. CFs, as franchisees, are independent businesses. As businesses, they are only successful if work is done to grow and maintain those businesses, including building relationships with and securing new customers. This is a fundamental requirement of a franchising model.
…
32. CFs run their own franchise businesses. …" (Emphasis added)
The arguments advanced by Aramex Sydney referred to at [54] above also do not fully engage with, much less embrace, Commissioner Webster's findings in TWU v NSW Couriers. As the Commissioner recognised at [35] of her decision, s 309(2) of the Act "envisages that a contract of carriage may co-exist with a franchise arrangement".
Chapter 6 of the Act does not detract from the fact that contract carriers are businesses in their own right. However, the Act recognises that the nature of the relationship created by a contract of carriage calls for particular rights, protections and obligations, for both the contract carrier and the principal contractor. These are reflected in the contract determinations made by the Commission pursuant to Ch 6.
[15]
The contract determination that already applies
This gives rise to the question as to whether Courier Franchisees which are contract carriers are already covered by a contract determination and, if so, which one. The terms of any applicable contract determination may be relevant to the dispute before the Commission.
This was not a question to which either party gave much attention in their cases. The TWU submitted that the Transport Industry - General Carriers Contract Determination 2017 ("GCCD") applies to Courier Franchisees which are contract carriers. It did not explore the implications of that coverage.
In the written submissions of Aramex Sydney referred to at [55] above it was contended that one of the reasons for which the Commission would decline to make the proposed contract determination was that "there are presently contract determinations already in place that deal with the same subject matter", referring to the GCCD and the Transport Industry - Courier and Taxi Truck Contract Determination ("CTTCD"). The submissions seem to suggest that both contract determinations apply, which for reasons explored below cannot be correct. The submissions did not identify how and to which Courier Franchisees the contract determinations apply, or how they were said to "deal with the same subject matter".
After the parties had finished their closing oral submissions, I raised this issue with them. I posed, in effect, three questions. First, whether either the GCCD or the CTTCD applies to Courier Franchisees which are contract carriers. Second, if either contract determination applies, whether on its terms it provided an answer, in whole or in part, to the TWU's claim. Third, whether the deductions were otherwise inconsistent with the basis on which those contract determinations had been made. I invited the parties to make further written submissions on these matters.
The parties accepted that invitation and each provided supplementary written submissions. The TWU maintained that the GCCD applies. Aramex Sydney contended that the CTTCD applies.
At first glance, the CTTCD might appear apt. The descriptor "Courier Franchisee" might be seen as indicating the nature of work performed. Mr Bovis described Aramex Sydney as running a "courier business". The CF Deed contains references to the Courier Franchisee performing "courier services" and conducting certain activities "in the course of a courier business". However, this evidence is not determinative as to whether the CTTCD applies.
Aramex Sydney relied on the definition of "Courier Work" in cl 1 of the CTTCD, which is in these terms:
"Courier Work" means the transportation by means of a courier or taxi truck vehicle of goods of up to a maximum of 250 kilograms of weight from one place to another by a contract carrier for reward at the behest of a principal contractor pursuant to a contract of carriage and where it is intended by the parties that the time to be taken is either:
(a) within a standard time requested of the contract carrier by the principal contractor and advertised as such (to be known for the purposes of this determination [as] 'standard service'), or
(b) within a time required of the contract carrier by the principal contractor which is the shortest possible time or within a time which is less than the standard time as in (a) above and advertised as such (to be known for the purposes of this determination as 'Express/Priority/V.I.P. Service') and where it is intended that in any event completion is to be effected on the same day as commencement or by the earliest reasonable time on the following normal working day.
There is no controversy that Courier Franchisees utilise a "courier or taxi truck vehicle" and transport "goods of up to a maximum of 250 kilograms of weight". Aramex Sydney contended further, however, that it requests or requires Courier Franchisees to transport goods either within the "standard service" or "Express/Priority V.I.P. Service" timeframes. In support of this contention, it referred me to particular terms of the CF Deed and CF Manual, and provided links to its website.
There is only limited reference in the evidence on which Aramex Sydney relied that specifies delivery times. The high point is item 7.40 of the CF Manual, which provides that a Courier Franchisee must deliver all freight on the day that it arrives into their bay at the depot. Under cross-examination, Mr Bovis confirmed that requirement, but the context in which he gave evidence is telling:
"Q. And they're required to attend Chullora every morning to collect the parcels they're required to deliver that day?
A. Yes.
Q. They're also required to attend Chullora at the finish of each day, aren't they?
A. To return the parcels, yes.
Q. When they attend in the morning, they're obliged to sort out the freight that they are to deliver?
A. They're required to sort the freight they're loading into their vehicle that's been presented to them.
Q. So they're required to collect up the parcels that have been reserved to them, which they are to deliver that day?
A. Yes.
Q. They load the parcels onto their vehicle?
A. Yes.
Q. And then they go out and perform their work, correct?
A. Yep.
Q. They're required to deliver those parcels within any timeframes that Aramex may stipulate from time to time?
A. We don't stipulate the time.
Q. It's not a matter of their discretion to deliver the parcels a week after they're received though, is it?
A. No, they're to be delivered that day but we don't stipulate specific times they're to be done by.
Q. So the parcels allocated to the courier franchisee must be delivered the day that the courier franchisee collects them from the depot, is that right?
A. Yes."
(Emphasis added)
Further, as the TWU submitted, nothing in the evidence to which Aramex Sydney referred me, including its website, discloses that the company advertises particular delivery times, whether by way of a "standard time" or a "time which is less than the standard time". The requirement that delivery times be "advertised as such" is necessary for the work to be "courier work" as defined in cl 1 of the CTTCD.
There is another obstacle to the application of the CTTCD. The Courier Franchisees are required to attend the depot at Chullora each morning, and load their vehicles with the parcels to be delivered in their "territory". They are also required during the day to pick up parcels that customers seek to have transported through Aramex network, and take them to the depot and load them, subject to size restrictions, onto the sortation system.
Clause 2.2(e) of the CTTCD provides that the contract determination will not apply to "contracts of carriage performed by contract carriers involved principally in parcel work". "Parcel Work" is defined in cl 1 of the CTTCD as follows:
"Parcel Work" means the transportation of individual items or goods by a contract carrier participating in a system of distribution of goods from one place to another for reward at the behest of a principal contractor pursuant to a contract or contracts of carriage by means of a motor vehicle which system of distribution usually involves:
(a) transportation to a depot;
(b) unloading and sorting into groups, each group comprising items to be delivered to places within a logical geographical zone;
(c) reloading onto vehicles; and
(d) transportation to such other place(s) either on the same day or on the following normal working day.
The "system of distribution" operated by Aramex Sydney in which the Courier Franchisees are engaged involves "parcel work" as defined. The CTTCD does not apply to that work.
Clause 2.1 of the GCCD provides that it applies to "all Contracts of Carriage" other than those covered by a "Nominated Contract Determination" or which are performed using a "Specialised Vehicle". There is no evidence of a Courier Franchisee using a Specialised Vehicle. There is no "Nominated Contract Determination" (as set out in Sch G to the GCCD) which is contended to apply, other than the CTTCD (which I have found not to apply).
It follows that I find that the GCCD applies to Courier Franchisees which are contract carriers.
[16]
Relevant terms of the GCCD
Amongst other things, the GCCD sets minimum rates of remuneration for the contract carriers to which it applies. When making the GCCD, Commissioner Newall observed in TI - GCCD 2017:
"19. I have made reference to the fact that the submissions before the Commission have advanced that this matter comes before the Commission by consent as an industrial compromise or an industrial agreement between the parties, but it ought not be thought, in my view at least, that this is simply a matter of the parties doing a deal. The parties - and I will return to this again later, the importance of this approach - rather than simply haggling out some figures that they could live with, have adopted the approach of developing a quite sophisticated cost and rate model which is now exhibit 5 in these proceedings. I have not seen an exercise of that complexity undertaken by any industry in advancing a new proposal for the structure of rates and conditions at any time whether in this Commission or in my experience in other industrial tribunals.
20. I accept what has been said to me that this model has been developed with the investment of significant time and resources. Its value it seems to me to lie in this: not only does it provide a proper justification for the rates that are advanced in the present contract determination application, but it provides a platform for dealing with disputes if there any during the life of the determination and further, for dealing with variations to the determination going forward. Based on that model and based on the reports and input that went into developing the model I am satisfied, as I have said, that the new rates do set a fair and reasonable safety net of cartage rates for contract carriers.
21. I accept, as it was submitted to me by the NSW Business Chamber, one of the employer group representatives, that the rates reflect proper cost recovery principles and therefore they allow contract carriers to be properly remunerated including covering costs. On the other hand they do not impose unfair costs on principal contractors or provide any kind of windfall gain. They are properly calculated rates factoring in cost recovery and, as was pointed out in submissions today, a margin."
The GCCD contemplated a phasing in of "New Rates" to "Old Rates". Schedule F to the GCCD makes clear that the "Old Rates" take into account and include payment for a range of items, including registration, insurance, fuel, oil, tyres, repairs and maintenance. This is significant having regard to the fact that the GCCD places the obligation on the contract carrier to register, repair and maintain their vehicle at their expense (cll 5.2 and 5.3), to "pay all of the running costs associated with" the vehicle (cl 5.4) and to maintain relevant insurances at their expense (cl 14.1).
At the time it was made by Commissioner Newall, the GCCD did not set rates for vehicles with a carrying capacity of less than two tonnes. As a result of Applications to vary the Transport Industry - General Carriers Contract Determination 2017 and Transport Industry - Courier and Taxi Truck Contract Determination [2022] NSWIRComm 1003, the GCCD was varied so as to insert rates of remuneration for "Light Vehicles", being those with a carrying capacity of up to and including three tonnes. The same rates were inserted into the CTTCD, subject to phasing-in arrangements.
As the decision makes clear, those rates were derived from a process similar to that adopted in respect of TI - GCCD 2017, on the basis of achieving cost recovery for a contract carrier (albeit that there was some reservation expressed by the TWU in those proceedings as to whether the rates achieved "true cost recovery" - see [19(2)]).
In this context, the submissions of Aramex Sydney that "[t]he cost of and deductions for scanners, freight sorting and the use of [outside hire]…are business expenses no different to that of tyres, fuel, maintenance, and registration of which there is no dispute the carriers must pay for" represents a fundamental misapprehension as to the regulation of contract carriers under the GCCD, including in particular how the minimum rates of remuneration in the GCCD (and the CTTCD) were derived.
In its supplementary written submissions, Aramex Sydney submitted:
"20. If however, the Commission is minded to consider the fairness or otherwise of the Respondent's present remuneration regime. The Commission should find that the present model of remuneration provides fair and reasonable remuneration for any contract carrier who may be engaged by the Respondent to adequately recover their costs and indeed provides a mechanism to allow contract carriers to make reasonable earnings above the CTTD.
21. In particular, the Courier Franchise Deed provides significant benefits to any contract carrier who may be engaged by the Respondent above that of the ordinary remuneration they may earn from traditional 'courier work,' in particular:
a. exclusivity of territories and capacity to grow the business within them;
b. commissions; and
c. provision for capital growth of exclusive area.
22. These factors, taken as part of the overall manner in which a contract carrier who may be engaged with the Respondent performs their role with the Respondent, provide for a fair and equitable level of remuneration that allows proper cost recovery." (Reproduced verbatim, footnotes removed)
As the TWU submitted, the contentions at par 22 of the above extract are "made in an evidentiary vacuum". The high point of the evidence led by Aramex Sydney in this regard was a table in Mr Bovis's statement containing the earnings, deductions and net earnings for each of Sanyara Pty Ltd, Selbik Pty Ltd and Successful Enterprises Pty Ltd for the "Full Year 2023". Aramex Sydney made no attempt to explain how those gross figures compared to the amounts payable to the relevant Courier Franchisee under the GCCD (or the CTTCD, assuming that to apply) for the relevant period, nor did it provide any evidence that would allow for such a comparison to be conducted. Similarly, there is no evidence as to the costs incurred by the Courier Franchisees so as to test the proposition that their remuneration provides them with "proper cost recovery".
It is also relevant to observe that in a number of instances, the GCCD provides that if the principal contractor seeks to impose a requirement on a contract carrier, it must do so at its own expense. This is seen, for example, in:
1. cl 5.9, which entitles the principal contractor to paint or sign-write the contract carrier's vehicle, provided that the principal contractor pays for the costs of the painting or sign-writing, and for making good the vehicle at the end of the engagement; and
2. cl 8, which provides that if the principal contractor requires the contract carrier to wear a uniform, it must supply that uniform at no cost to the contract carrier (cl 8.1). The uniform remains the property of the principal contractor (cl 8.3).
Clause 5.7 of the GCCD is of particular relevance to the deduction in respect of scanners. That clause relevantly provides as follows:
"5.7 Communication and Related Technology
(a) The Principal Contractor may supply the Contract Carrier with communication and related technology for use in the Contract Carrier's Vehicle.
(b) Where such communication and/or related technology is supplied by the Principal Contractor:
(i) The Principal Contractor must install and maintain the communication and related technology required by the Principal Contractor and the Contract Carrier must operate it efficiently as directed by the Principal Contractor.
(ii) The Contract Carrier has full responsibility for the safe custody of the communication and related technology.
…
(d) Immediately upon the ending or termination of any head contract under which the Contract Carrier performs the Cartage Work:
(i) the Contract Carrier must return the communication and related technology to the Principal Contractor in good order and condition, save for any fair wear and tear only; and
(ii) the Principal Contractor must make good any repairs to the Contract Carrier's Vehicle arising from the removal of the communication and related technology."
The term "communication and related technology" is not defined in the GCCD. It is at least arguable that it would extend to scanners. There is nothing in the GCCD which suggests that a principal contractor can require a contract carrier to pay for the cost of the communication and related technology. The obligation on the part of the principal contractor to make good the contract carrier's vehicle on removal of the technology might suggest that the costs of supplying and installing it are also to be borne by the principal contractor, by analogy with cl 5.9.
Clause 10 of the GCCD has potential relevance to the deduction for outside hire. It relevantly provides as follows:
10. Annual Leave
10.1 Entitlement
A Regular Contract Carrier may take four weeks' annual leave without payment.
…
10.4 Utilisation of Vehicle
To avoid any doubt, and unless otherwise agreed between the parties, during any period of annual leave the Contract Carrier has no obligation to present their Vehicle to the Principal Contractor for Cartage Work.
The GCCD at cl 1.1 defines a Regular Contract Carrier as a contract carrier "who operates under a contract with a Principal Contractor and who is wholly or principally engaged by that Principal Contractor". In light of the evidence as to the basis on which Courier Franchisees are engaged by Aramex Sydney, this definition would apply to a Courier Franchisee which is a contract carrier.
The entitlement of a contract carrier to take four weeks annual leave is at odds with a requirement that a Courier Franchisee perform work "year-round", as the documents reflecting their terms of engagement anticipate.
I am mindful that Courier Franchisees will have executed a CF Deed, binding them to comply with the CF Manual. I also have regard to the fact that some Courier Franchisees, including Cencik Pty Limited and Successful Enterprises Pty Ltd, signed documents titled "Deduction acknowledgement form", authorising Aramex Sydney to deduct from their remuneration amounts for the scanners, freight sorting and outside hire, amongst other things.
However, it was not suggested by Aramex Sydney that these matters are to be taken as an agreement within the meaning of cl 10.4 of the GCCD. This is unsurprising given that it disputes that the GCCD has any application. That said, there is no basis on which I could find on the evidence that the contractual arrangements between Aramex Sydney and its Courier Franchisees contemplated cl 10 of the GCCD and that, as a consequence, an agreement for the purposes of cl 10.4 is to be inferred.
Absent such agreement, the premise of Aramex Sydney's justification for deducting the costs of outside hire falls away, if those costs are incurred while a Courier Franchisee which is a contract carrier is on annual leave. There is little evidence as to whether this occurs. To the contrary, Mr Wong deposed that he has not taken annual leave for some years out of concern for the costs that he would incur through the engagement by Aramex Sydney of outside hire. This brings into focus the extent to which the arrangements Aramex Sydney has with its Courier Franchisees depart from the protections offered by the GCCD.
[17]
Implications were the CTTCD to apply
Notwithstanding my finding that the GCCD applies to Contract Franchisees which are contract carriers, there are several observations that can be made were I to have accepted Aramex Sydney's contention that the CTTCD was the applicable contract determination. As these remarks are necessarily obiter dicta, I will keep them brief.
In short, Aramex Sydney failed to acknowledge or address the implications of the CTTCD applying, both for itself and the relevant Courier Franchisees.
As I have already canvassed at [99]-[100] above, the rates of remuneration contained in the CTTCD were calculated having regard to the principle of "cost recovery" for a contract carrier. Aramex Sydney did not grapple with the question as to whether its practice of making deductions from Courier Franchisees' remuneration is consistent with that principle.
Further, the CTTCD provides:
12. Remuneration
…
12.3 The principal contractor shall be entitled to deduct and retain from any remuneration the contract carrier is entitled to receive:
12.3.1 any amounts payable to the principal contractor by the contract carrier pursuant to this contract determination, provided that the contract carrier has first given written authority to the principal contractor specifying the nature and the amounts which may be so deducted; and/or
12.3.2 a maximum of the sum of five hundred dollars in the event of the contract carrier ceasing to perform further contracts of carriage with the principal contractor. …
12.4 The following deductions are not permitted, whether by agreement or otherwise:
• Radio or radio accessory fees or charges.
• Fees or charges for on-board computers or display screens or mobile data units or similar equipment, or for computer consumables.
• Administration fees.
• Contributions towards bonus schemes.
Scanners appear to be a form of "mobile data units or similar equipment". On its terms, cl 12.4 would preclude deductions being made in respect of them.
The TWU submitted that "administration fees" would extend to costs associated with freight sorting. I am not entirely persuaded by those submissions, but it is not necessary that I form a concluded view on the matter. It suffices to say that it is an arguable point.
Even if it were determined that cl 12.4 did not cover freight sorting, and noting that nothing in that provision could be said to encompass the costs of engaging outside hire, there is a further argument that cl 12.3 delimits the deductions that can be made from a contract carrier's remuneration. If that were found to be the case, it is significant that nothing in the CTTCD anticipates a contract carrier being liable for costs incurred by the principal contractor in sorting freight or engaging outside hire to perform work for or in place of the contract carrier. It follows that those amounts could not be said to be payable "pursuant to this contract determination". Again, this is not a matter on which I need to express a concluded view.
The TWU drew my attention to a number of provisions of the CTTCD which were to a similar effect to those of the GCCD referred to at [104] above. That is, that made the principal contractor responsible for the costs of imposing a particular requirement on a contract carrier. I will not traverse those provisions.
[18]
Whether existing industrial coverage is sufficient
In its supplementary written submissions, Aramex Sydney submitted:
"23. If the Commission is so minded as to determine the current dispute by making a finding that the CTTD applies to any contract carrier that may be engaged by the Respondent (or if it is to determine the dispute on the basis that the GCCD applies) then the Commission should not make any determination as to whether the Respondent has contravened sections 118 or 119 of the IR Act. It is not necessary for the Commission to make a determination when the CTTD and the IR act, together, already provide fair and reasonable conditions. If the Commissioner is satisfied that the existing suite of industrial regulation is adequate to secure fair and just, then it would serve no practical purpose to make duplicative obligations. To the contrary, a determination would create greater complexity and creating more administrative burden.
…
25. In addition to the above, if the Commission is to find that an overarching determination such as the CTTD or the GCCD applies then the Commission should not make the determination are sought by the Applicant.
26. In circumstances where the Commission finds that either the GCCD or the CTTD applies, the relevant determination provides a comprehensive industrial framework for the management of the relationship between the Respondent and any contract carrier that they may engage.
27. Making the contract determination as sought by the Applicant would only create an unnecessary, more burdensome and potentially duplicate system of reregulation. …" (Reproduced verbatim)
It is well-settled that awards of the Commission are presumed to set fair and reasonable conditions of employment: City of Sydney Wages/Salary Award 2014 (2014) 247 IR 386; [2014] NSWIRComm 49 at [12]. In light of the authorities to which I have referred at [62]-[63] above, I consider that contract determinations should be subject to the same presumption.
It follows that had Aramex Sydney demonstrated that the relevant deductions were permitted by an applicable contract determination, it would have had the benefit of the presumption and it would have been for the TWU to rebut it. However, the presumptive fairness and reasonableness of an applicable contract determination would only assist Aramex Sydney were it able to demonstrate that the arrangements that it has in place with its contract carriers are contemplated by and consistent with that contract determination. The application of a presumptively fair and reasonable contract determination provides no defence to a principal contractor if it is engaging in conduct which is not contemplated by that contract determination and which is not fair and reasonable.
[19]
Conclusions
Having considered all of the evidence and submissions, and in particular having regard to the discussion at [15]-[43] above, I do not consider that it is fair and reasonable for deductions to be made in respect of scanners, freight sorting and outside hire.
I do not accept these submissions advanced by Aramex Sydney that the deductions are primarily for the benefit of Courier Franchisees. In relation to scanners, and while I accept that there may be efficiency and convenience resulting from their use by Courier Franchisees, I am not persuaded that they are properly to be regarded as "optional". They are an integral part of the business operated by Aramex Sydney and its affiliated companies, allowing for the effective tracking of freight throughout the "network". They also facilitate the management of the systems under which Aramex Sydney pays its Courier Franchisees.
The deduction for freight sorting similarly seems to be directed more towards defraying the costs to Aramex Sydney of installing and maintaining the sortation system at its Chullora depot. The possibility that freeing Courier Franchisees from the responsibility of sorting freight may enable them to do more work on their runs and so "grow their business", as Aramex Sydney submitted, strikes me as a potential byproduct, but not a real and substantial motivator, for the current arrangements.
It is difficult to see any tangible benefits flowing to Courier Franchisees as a result of the engagement by Aramex Sydney of outside hire. At most, it might be said that their business does not suffer as a result of their territory not being serviced during any period for which they are unable to perform work. However, it was clear from the evidence of Mr Bovis that the primary goal of Aramex Sydney when engaging outside hire is to maintain the integrity of the broader Aramex network.
I also have concerns with the absence of a rationale as to the quantum of the deductions in respect of scanners and freight sorting. On the evidence of Mr Bovis, the amounts seem to be arbitrary.
As to the cost of engaging outside hire, it suffices to observe that the third party companies to be engaged, and the rates they are to be paid, are entirely at the discretion of Aramex Sydney.
In considering the quantum of the deductions, I also have regard to the fact that prospective Courier Franchisees must pay a non-refundable initial franchise fee to Aramex Sydney as a pre-condition to being engaged. As counsel for the TWU submitted in oral submissions:
"Can I just make one additional point in respect to the initial franchise fee, that franchise fee as Mr Bovis set out is not an insignificant fee and it is one which Mr Bovis could not explain where it went, what it was applied to but it is one that in order to have the privilege of working for Aramex a contract carrier has to pay and the fact that a carrier has to pay that fee, which Aramex retains the benefit of, the carrier never gets it back, they terminate the contract for whatever reason and they do not get reimbursed that fee, that is a relevant matter pointing to these additional deductions being unfair in the circumstances."
Finally, I consider that the deductions are inconsistent with the scheme of regulation of contract carriers contemplated by the GCCD. Having regard to my remarks above at [97]-[112] concerning the terms of the GCCD, I am in broad agreement with the following contentions in the TWU's supplementary written submissions:
"28. It is antithetical to the regime established by the GCCD for a principal contractor to deduct moneys from a contract carrier's remuneration for:
a. scanners, which are an item of communication and related technology in which the GCCD contemplates the principal contractor is responsible for;
b. freight sorting, which the GCCD does not contemplate carriers are responsible for; or
c. for work performed by 'outside hire' or other carriers.
29. Expenses of the kind described in paragraph 26 [sic - 27?] above are not matters for which carriers are remunerated under the GCCD. Imposition of deductions for such expenses involves carriers being burdened with costs which: (i) they are not contemplated by the GCCD to bear; (ii) which they are not otherwise remunerated for; and (iii) which the GCCD, whether expressly or impliedly, contemplates the principal contractor is responsible for."
For these reasons, I have determined that it is fair and reasonable that a contract determination be made precluding Aramex Sydney deducting from the remuneration payable to its Courier Franchisees which are contract carriers amounts in respect of scanners, freight sorting and the engagement of outside hire. I observe in particular that as there is room for argument as to whether scanners are "communication and related technology" within the meaning of cl 5.7 of the GCCD, a contract determination will serve to avoid any disputes in this regard.
I accept the submissions of Aramex Sydney that the contract determination should be clear on its terms that it will apply only in respect of Courier Franchisees which are contract carriers, and not to any other class of carrier which may be engaged by Aramex Sydney (such as Courier Lites). The only evidence before the Commission concerns the arrangements between Aramex Sydney and Courier Franchisees.
I acknowledge that the making of the contract determination could have implications for the Courier Franchisees. In this regard, I draw attention to pars 76-78 of Mr Bovis's statement, reproduced at [41] above.
[20]
Determination and directions
I have determined to make a contract determination. Without limitation to terms which may be necessary to meet the requirements for approval under the Act, the contract determination will:
1. operate with respect to contracts of carriage between Aramex Sydney and its Courier Franchisees;
2. for the avoidance of doubt, contain definitions to the following effect:
1. "contract of carriage" has the meaning given to that term in s 309 of the Act;
2. "outside hire" refers to third party transport providers, but does not include Blu Couriers; and
3. "scanners" refers to handheld devices used by Courier Franchisees in the performance of their duties, and all associated technology and equipment;
1. provide that Aramex Sydney must not deduct from the remuneration of a Courier Franchisee:
1. any amount for the supply, installation, maintenance and use of scanners. This does not include costs resulting from the misuse or mistreatment of the technology by the Courier Franchisee;
2. costs associated with the sorting of freight; or
3. costs associated with utilising outside hire; and
1. have a nominal term of three years commencing from the date on which it is made.
I make the following directions:
1. The parties are to confer with a view to reaching agreement on short minutes of order to give effect to my determination at [135] above, including the terms of the contract determination to be made.
2. By 4.00pm on Friday, 9 August 2024 the TWU is to:
1. file and serve the agreed short minutes of order and proposed contract determination; or
2. failing agreement between the parties as to the terms of the short minutes of order or proposed contract determination, inform the Commission by way of email to the Registry as to the status of the matter, including the outcome of discussions between the parties in accordance with the direction at [136(1)] above, the issues remaining in dispute between them, whether those issues are likely to be resolved through further discussions between the parties and, if so, the timeframe within which it is anticipated that an agreement will be reached.
Damian Sloan
Commissioner
[21]
Amendments
23 July 2024 - Corrected the year under 'Hearing Dates', 'Date of orders' and 'Decision date' from '2023' to '2024'.
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Decision last updated: 23 July 2024