Transport Workers' Union of New South Wales v NSW Couriers Pty Ltd t/a Aramex

Industrial Relations Commission (NSW)|2022-06-29

PRELIMINARY decision

If you are an Australian business selling goods that require delivery to your customers whether, locally or internationally, you may engage a courier business known as Aramax for that purpose.
These proceedings relate to businesses operating within the "Aramex System", namely Aramex Sydney Pty Ltd ("Aramex Sydney") and several companies, known as Courier Franchisees ("CFs"), represented by the Transport Workers' Union of New South Wales ("TWU").
On 25 February 2022, the TWU notified a dispute pursuant to s 332 of the Industrial Relations Act 1996 (NSW)("Act") in relation to CFs and Aramex Sydney ("industrial dispute"). The industrial dispute notification raises a number of industrial issues between the CFs and Aramex Sydney. Although some of the evidence in the matter touched upon these issues, they are not relevant to this decision.
As a preliminary step in this matter, I am required to determine whether Aramex Sydney and the CFs are engaged in a "contract of carriage" and, if so, whether Aramex Sydney is a "principal contractor", as these phrases are defined in the Act.
If the answer to either of these questions is "no", then the Commission does not have jurisdiction to proceed with this matter. For the reasons I have set out in this decision, I have decided that the Commission has jurisdiction to proceed with the industrial dispute filed on behalf of the CFs.

Background

On 7 March 2021, Aramex Sydney filed a notice of motion seeking the following orders: 1. a finding that the arrangements between Aramex Sydney and the CFs engaged by Aramex Sydney is not a contract of carriage within the meaning of that term, pursuant to s 309 of the Act; 2. a finding that Aramex Sydney is not a principal contractor within the meaning of that term pursuant to s 310 of the Act; 3. the Commission does not have jurisdiction to hear the dispute the subject of the industrial dispute notification; 4. the industrial dispute be dismissed; and 5. no order as to costs.
Aramex Sydney denies that it is engaged in contracts of carriage with the CFs within the meaning of that phrase as it appears in s 309 of the Act. They further submitted that, Aramex Sydney, for the most part, is not a principal contractor within the meaning of that phrase as it appears in s 310 of the Act.
Aramex Sydney moved on the motion seeking the above orders on 27 June 2022. The matter was heard over three days from 27 to 29 June 2022. After the hearing, the parties filed their final submissions as follows: 1. Aramex Sydney submissions filed 29 July 2022 ("Aramex Sydney submissions"); 2. TWU submissions in reply filed 17 August 2022 ("TWU submissions"); and 3. Aramex Sydney submissions in response filed 1 September 2022 ("Aramex Sydney reply submissions").
In summary, the TWU submitted that the motion should be dismissed. Their primary position was that the Commission should find that each of the CFs performed contracts for the transportation of goods in the course of a business of transportation of goods of a particular kind by motor vehicle for the purposes of subs 309(1)(c) of the Act. Further, Aramex Sydney was the person for whom the CFs agreed to transport the goods to which the contracts of carriage relate for the purposes of subs 310(1) of the Act.
In the alternative, the TWU submitted that the CFs carried on businesses under franchise arrangements for the purposes of subs 309(2) of the Act and Aramex Sydney as franchisor is their principal contractor. Finally, the TWU argued that if either of the above submissions are not accepted, the Commission should conclude for the purposes of subs 309(3) that the contracts between the CFs and Aramex Sydney were entered into for the purpose of defeating, avoiding or evading Ch 6 of the Act and but for being entered into for that purpose, would have been contracts of carriage.
Aramex Sydney relied upon a written statement of Mr Piotr Erik Lipinski dated 30 March 2022, a director, and the company secretary of Aramex Sydney: (Ex R8). Exhibits to the statement of Mr Lipinski were marked separately: (Ex R9).
Aramex Sydney also relied upon three written statements of Mr Andrew McKenna, the former Chief Executive Officer of Aramex Sydney (at the time of giving evidence, the director of Strategic Innovation for Australian Couriers Pty Ltd ("Australian Couriers")). These statements were dated 29 April 2022 (Ex R1), 8 June 2022 (Ex R2) and 20 June 2022 (Ex R3). Exhibits to Mr McKenna's first and second statements were marked separately as Ex R4 and Ex R5 respectively. Mr McKenna's evidence in chief was largely responsive to the TWU witness evidence. Mr McKenna and Mr Lipinski were cross-examined at the hearing.
Both parties filed documents setting out objections to the others evidence. The Commission is not bound by the rules of evidence but is required to act with equity and good conscious and the substantial merits of the case: s 163 of the Act. I have had regard to the parties' objections to the evidence when determining the appropriate weight to give that material. I particularly note the witness evidence of both parties included legal conclusions, including with respect to the core contentions between the parties, such as the contractual relations between customers and CFs, whether the CFs and Aramex Sydney were engaged in a contract of carriage and if Aramex Sydney is a principal contractor. I have attributed no weight to the witnesses' conclusions on these matters.
Mr Lipinski gave evidence with respect to the way in which the Aramex Network is arranged. He was cross-examined in a limited fashion about vehicles owned by Aramex Sydney and the nature of national accounts. He gave evidence that national accounts, "most probably account for about 20 per cent of the revenue that goes into the whole network": Tcpt, 27 June 2022, p 91 (45-47). Further, Mr Lipinski gave evidence that there is a National Client Development Manager, whose main role is to look for multi-site or large accounts to bring into the Aramex Network: Tcpt 27 June 2022, p 92 (8-17).
The TWU relied upon the written statement of Ms Isabella Wisniewska, a Legal Officer of the TWU dated 14 April 2022 (Ex A1). The TWU also relied upon the written statements of representatives of four CFs filed on 18 May 2022, namely: 1. Ms Semra Selbik, director of Cencik Pty Ltd ("Cencik") (Ex A2); 2. Mr Fook 'Ricky' Wong, director of Successful Enterprise Pty Ltd ("Successful Enterprise") (Ex A4); 3. Mr Sam Hamady, director of Sanyara Pty Ltd ("Sanyara") (Ex A9); and 4. Mr Christopher Glinatsis, director of OGA Transport Pty Ltd ("OGA Transport") (Ex A10). All the TWU witnesses were required for cross-examination at the hearing.
Although there was a significant volume of evidence filed in the proceedings, most of the factual matters were not in dispute. However, as foreshadowed, the legal conclusions that should be drawn from those facts were controversial between the parties. It is necessary to document some background with respect to the business operations of Aramex.
Aramex Sydney is a wholly owned subsidiary of Aramex Australia. Prior to February 2016, the entities which now trade under the Aramex brand were known in Australia as "Fastway".
Aramex Australia is the national master franchisor for all the Aramex Group's operations in Australia. Within its operation, Aramex Australia has 29 Regional Franchisees ("RFs") across the country. One of those RFs is Aramex Sydney.
Aramex Sydney is one of a number of entities that has a franchise deed with Aramex Australia. Aramex Sydney employs 69 people directly.
Aramex Sydney consists of 219 geographical territories, of which 70 (about 32 per cent) are owned by Aramex Sydney directly. The remaining 149 territories are the subject of deeds with CFs ("CF deed") as I will explain shortly. In addition to contracting with CFs, Aramex Sydney engages "Courier Lite Franchisees" ("CLs") and "Blu couriers" ("Blus").
CLs are allocated a primary non-exclusive focus area for pick up and delivery. CLs are engaged by way of a template franchise deed with Aramex Sydney and are allocated an area which have been 'given up' by CFs or are owned by Aramex Sydney. Blus are described by Aramex Sydney as 'gig' workers engaged pursuant to a template 'Blu Couriers Agreement' through the 'Blu platform'. Blus are engaged by RFs and CFs and do not have set runs or reasonable expectation of ongoing work.
The CF deed expresses its Purpose in the following terms at cl 1.4: "Purpose (a) The purpose of this Franchise Agreement is to: (i) set out the terms and conditions on which the Courier Franchisee is to be granted the right to operate the Business using the Trade Marks, and system; (ii) set out the requirements for the Courier Franchisee's operation of the Business and the Courier Franchisee's payment and other obligations; (iii) enable the Franchisor to exercise control over the Courier Franchisee's use of the Trade Marks and System and the operation of the Business generally to protect the value and integrity of such items and to help ensure a consistent customer experience throughout the network; and (iv) generally describe the structure of the business relationship between the Franchisor and the Courier Franchisee over the Franchise Period, and where applicable at the end of the Franchise. (b) The parties acknowledge that the purpose of this Agreement is not to create any employment, agency, partnership, fiduciary or other relationship other than a franchise relationship between independent business proprietors. The parties further acknowledge that the purpose of this Agreement is not to provide the Courier Franchisee with any guaranteed or projected income or return on investment, or any ongoing right to operate the Business after the Franchise ends. (c) The parties acknowledge and agree that no other purpose is intended, or to be implied."
By the CF deed, the CFs are obliged to pick up parcels within their territory and deliver all packaged goods said to be contracted by licensees (meaning all other persons licensed to use "the Aramex System", such as another CF). In practice what this means for the CFs the subject of these proceedings is that they are obliged to pick up parcels from customers within their territory and drop them to the Aramex Sydney depot located in Chullora, New South Wales. From there, the parcels are delivered by another company, Linehaul Express Australia Pty Ltd to other regional franchisee depots. The CFs are obliged to collect parcels that have made their way to Chullora having been picked up by others within the "Aramex System" and deliver them to customers within their territory. In addition, there may be some point-to-point work within the CFs territories.
The CFs are informed of pick up and deliveries by Aramex Sydney through a scanner supplied to them. They pay a fee to Aramex Sydney for the use of the scanner. CFs refer prospective customers to a sales representative of Aramex Sydney.
Each of the CF witnesses gave evidence with respect to their initial engagement with Aramex Sydney, or Fastway as the business was previously known. This involved the CF executing a CF deed, providing them with a territory, for a sum of money ranging between $28,000 and $45,000. The witnesses referred to this as purchasing a particular "run". The CFs also gave evidence of purchasing vehicles to complete the work required under the CF deed.
Under cross-examination, the CFs gave evidence that their businesses had exclusive responsibility for the pick up and drop off of parcels within their territories. The CFs had some complaints about the use of outside hire by Aramex Sydney to complete work in their territories. Ms Selbik gave evidence of there occasionally being other couriers in her territory in respect of "sendle" work, but she was unable to confirm that this was at the direction of Aramex Sydney. Mr Glinatsis gave evidence of outside hire being engaged to do work on his run by Aramex Sydney when he was "up to date". However, he confirmed that he remained in discussions with Aramex Sydney about being charged for these outside hire services: Tcpt, 29 June 2022, p 46 (36) - p 47 (20).
Mr McKenna confirmed in his evidence that outside hire is organised by Aramex Sydney from time to time in respect of work being conducted within the territories of CFs, for example when freight is not being delivered in time. The CFs gave evidence of being able to speak to the Regional Franchise Manager to organise outside hire to complete their runs where they required this. It was not in contest that when outside hire was utilised, the CF is required to pay for those services.
The CFs also confirmed their understanding of their responsibility to locate new customers within their territory, although the evidence was also consistent that new customers are referred on to Aramex Sydney who "signs them up" and determines the rates they will be charged for deliveries. The evidence was also consistent that there were a range of ways in which customer complaints can be managed, and customers are able to contact CFs directly if they have a problem with a delivery.
Neither party called a customer or end user of the system to provide their understanding of the contractual relationship they entered into with respect to the services they procured under the Aramex brand.

Relevant Legislation

Chapter 6 of the Act is entitled, "Public vehicles and carriers". Part 1 of Ch 6 provides for "Application and definitions". Section 306 of the Act states that the contracts to which Ch 6 applies are contracts of bailment and contracts of carriage.
The chapeau of subs 309(1) of the Act relevantly defines a contract of carriage 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…"
The nature and status of the carrier of the goods is detailed in subs 309(1)(a)-(c). It is uncontentious that the CFs in these proceedings are body corporates for which s 309 otherwise applies: subs 309(1)(c).
In RJ Enterprises (Aust) Pty Ltd v Booth Transport Pty Ltd (2012) 221 IR 64, the Industrial Court said the following in relation to subs 309(1) (at [36]): "Thus, a contract of carriage is defined to mean a contract for the transportation of goods by means of a motor vehicle. We agree with the submissions made by the Transport Workers' Union (NSW), intervening in the proceedings, that the word 'for' imports the meaning 'with the object or purpose of', citing the Macquarie Concise Dictionary, (3rd ed). This submission was adopted by the applicants. Accordingly, in determining whether there is a contract of carriage, one looks to the purpose of the contract to ascertain whether or not it is for the transportation of goods. It is not necessary that the transportation of goods be the sole subject matter of the contract, so long as it is a dominant purpose. Obviously, such a contract could legitimately deal with a number of ancillary and necessary matters, such as arrangements for the pick up of goods, loading and unloading goods and the like."
Thus, in determining whether contracts of carriage are in place between Aramex Sydney and CFs in these proceedings, the Commission is to embark upon an examination of the purpose of the relevant contracts to determine if: 1. their dominant purpose is for the transportation of goods; and 2. the transportation occurs in the course of a business of transporting goods of that kind.
In these proceedings, the TWU's witnesses are expressed to be franchisees. Subsection 309(2) of the Act envisages that a contract of carriage may co-exist with a franchise arrangement: (2) For the purposes of subsection (1), a reference to a carrier includes a carrier carrying on business under a franchise or other arrangement. Hence the fact that the parties' contractual arrangements can be described as a franchise, does not mean that the arrangement is not a contract of carriage.
The Act contains what might be coined an "anti-avoidance" provision. The Commission has a discretion to declare a contract to be a contract of carriage if it is found that the contract was entered into for the purposes of defeating, evading, or avoiding the provisions of the Act relating to contracts of carriage; and but for being entered into for that purpose, the contract would have been a contract of carriage: subs 309(3). Subsection 309(3) applies if the relevant contract is not found to be a contract of carriage: Grech and Son Transport v Bing Lee Electrics Pty Ltd [2005] NSWIRComm 228 at [66].
Subsection 309(4) excludes certain types of contracts from the definition of a contract of carriage. It is in the following terms: (4) A contract of carriage does not include a contract - (a) that is, if the carrier is a common carrier, made in the ordinary course of the business of the carrier as a common carrier, or (b) that is made in the ordinary course of business for the carriage of packaged goods for different principal contractors by the use of the same motor vehicle or bicycle, or …
Subsection 309(4) must be read in conjunction with s 310 of the Act: "310 Principal contractor - meaning (1) For the purposes of this Chapter, a principal contractor is, subject to this section, the person for whom the carrier under a contract of carriage agrees to transport goods to which the contract relates. (2) If - (a) a contract of carriage is made by the acceptance by an agent of the carrier of an offer to enter into the contract not directed specifically to that carrier, and (b) the agent accepted the offer in the course of a business of acting as agent for the receipt and acceptance, on behalf of 2 or more prospective carriers, of offers to enter into contracts of carriage, and (c) the agent has a discretion in the selection of the prospective carrier on whose behalf an offer received in the course of that business will be accepted by the agent, the agent is, for the purposes of this Chapter, to be regarded as the principal contractor under the contract to the exclusion of the offerer. (3) For the purposes of section 309 (4) (a) and (b), the carrier under a contract of carriage made as referred to in subsection (2) is to be regarded as having held himself or herself out as ready to transport the goods to which the contract relates for the person required by subsection (2) to be regarded as the principal contractor and not to have held himself or herself out as ready to transport the goods for the offerer so referred to."
Subsections 310(2) and (3) are derivatives of the Industrial Arbitration Act 1940 (NSW) as amended by the Industrial Arbitration (Contracts of Carriage) Amendment Act 1983 (NSW) ("1983 Amendment Act"), assented to on 31 December 1983: see ss 5(3C) and 5(3E). The amendments make clear that Ch 6 of the Act can apply to an entity that acts as an agent for another, in engaging a carrier to transport goods. It follows that a finding that there is a contract for the delivery of goods between a customer and the CFs does not necessarily lead to the conclusion that Ch 6 of the Act does not apply.
The Attorney General, the Honourable DP Landa introduced the second reading speech for the Industrial Arbitration (Contracts of Carriage) Amendment Bill (1983) which became the 1983 Amendment Act. The Attorney relevantly stated: Most honourable members will be aware that in 1979 the Industrial Arbitration Act was amended to give effect to recommendations of the State Industrial Commission in court session in its inquiry into section 88E of the Industrial Arbitration Act on 23rd February, 1970. Lorry owner-drivers who are the subject of that 1979 legislation are drivers who own and drive one vehicle only, and employ no other person in connection with their driving work-that is, a second driver or off-sider or any other employee. They are not employees in law. The 1979 legislation permitted them to have their remuneration and conditions of employment reviewed and determined by State industrial tribunals. As recommended by the Commission, lorry owner drivers who are common carriers are excluded from industrial coverage under the 1979 legislation. The reason for this exclusion is that in the case of common carriers there is no analogy of any kind with employment. However, agreements are presently being made that contain a provision by which a carrier acknowledges that he is a common carrier and as such does not fall within the provisions of the Industrial Arbitration Act. In this way the 1979 amending legislation is being defeated. It is to this problem that this bill addresses itself. The object of the bill is to ensure that the exclusion for common carriers is not used to assist schemes designed to avoid the provisions of the Industrial Arbitration Act. The bill represents a tightening up of the 1979 legislation ... Item (1) and item (2) of schedule 1 to the bill amend the definitions of carrier and principal contractors and the explanation of references to contracts of carriage in the Act. Item (3) will ensure that neither the exclusion of a common carrier from the operation of the Act with respect to contractors of carriage, nor the exclusion from the operation of the Act in certain circumstances of a contract of carriage that is one of a number of contracts of carriage executed with the same motor lorry, are used to further avoidance scheme. Item (4) will complement the scheme of the bill by deeming a person who would otherwise have entered into the contract as agent of a carrier to be the principal contractor, and the person for whom the carrier held himself out as willing to transport the load the subject of the contract.
The second reading speech makes clear that the object of the inclusion of subss 310(2) and (3) was to extend the operation of Ch 6 of the Act to certain arrangements even where the contracts provide that the carriers are common carriers. What can also be gleaned is that Ch 6 is beneficial legislation, designed to protect drivers who are not employees, but whose engagement is analogous to employment.

The correct approach to considering the applicability of ss 309 and 310 of the Act

The TWU submitted that the principles applying to the Commission's power to summarily dismiss proceedings pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") are applicable to the Commission in the context of determining the motion. Rule 13.4 provides for the summary dismissal of a matter on the basis that: 1. a proceeding is frivolous or vexatious; or 2. no reasonable cause of action is disclosed; or 3. the proceedings are an abuse of process.
The principles relevant to the Commission's jurisdiction to summarily dismiss a matter pursuant to r 13.4 of the UCPR are not applicable to this decision. The Commission is required to make a preliminary decision as to whether there is a contract of carriage pursuant to s 309 of the Act, or in the alternative that Aramex Sydney is not a principal contractor within the meaning of s 310. The Commission is required, by the motion, to make a final decision as to whether there is a jurisdictional basis for the application. The test is not whether it is arguable that there is jurisdiction. There is no discretion to do anything other than dismiss the matter if Ch 6 of the Act is not enlivened by a finding of the requisite relationship between the parties. There remains the question of how to approach the issue of whether there is a contract of carriage between the parties and whether Aramex Sydney is a principal contractor within the meaning of the Act. I turn to consider that question now.
The meaning of "contract of carriage" and "principal contractor" has not been considered by a Court or Full Bench of the Commission. Commissioner Connor decided a challenge on jurisdiction analogous to the matter at hand in Transport Workers' Union of Australia, New South Wales Branch & Courier Please re: alleged breach of dispute procedures [2002] NSWIRComm 1046 ("Couriers Please").
In that matter, Connor C referred to the decision of the High Court in Hollis v Vabu Pty Limited (2001) 106 IR 80 concerning the distinction between an independent contractor and an employee. Commissioner Connor noted that the High Court said that clauses deeming the relationship to be that of independent contractor, rather than employee "…are not of themselves determinative, as parties cannot deem the relationship between themselves to be something it is not…". Although he noted the Commission was not engaged in the task of determining whether the relationship was one of contractor or employee, Connor C found that (at pp 25-26): "…But the High Court's comments are equally relevant, in my opinion, to the relationship under inquiry in these proceedings. It is trite to say that merely designating any contract as being of a certain class does not necessarily make it so. Nor may parties contract out of relevant obligations under industrial legislation if the substance of what they have actually done properly sits in an area where there is regulation by such legislation (San Remo (Southland) Pty Limited v. Farrell (1987) 22 IR 291 at pp.293 and 294)."
Aramex Sydney argued that the reasoning applied by Connor C in characterising the relationship between the parties in Couriers Please is not consistent with the High Court decision in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2002] HCA 1 ("Personnel"); ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 ("Jamsek"). Aramex Sydney argued that the Commission must follow the High Court's approach that where the parties have comprehensively committed the terms of their relationship in a written contract, the characterisation of that relationship must proceed by reference to those rights. Aramex Sydney referred to the High Court's decision in Personnel at [57]-[59] (as applied in Jamsek at [8]): "In Hollis, the 'contractual relationship' pursuant to which Vabu 'imposed' its work practices upon couriers was partly oral and partly in writing. The terms of the relationship between the parties had not been committed comprehensively to a written agreement. Moreover, there was no suggestion in any of the judgments in Stevens or Hollis that their Honours entertained any misgivings as to the statements of principle in Chaplin and Narich. Indeed, in Stevens, Mason J (with whom Brennan J agreed) and Wilson and Dawson JJ referred to Chaplin with evident approval. It is also noteworthy that Gleeson CJ, who followed Narich in Connelly v Wells, was a party to the plurality judgment in Hollis. As has been correctly observed, Hollis 'does not alter or even challenge the orthodox principle that courts are not concerned with what has 'actually occurred' in a relationship, but rather with 'the obligations by which the parties [are] bound''. Uncertainty in relation to whether a relationship is one of employment may sometimes be unavoidable. It is the task of the courts to promote certainty with respect to a relationship of such fundamental importance. Especially is this so where the parties have taken legitimate steps to avoid uncertainty in their relationship. The parties' legitimate freedom to agree upon the rights and duties which constitute their relationship should not be misunderstood. It does not extend to attaching a 'label' to describe their relationship which is inconsistent with the rights and duties otherwise set forth. To do so would be to elevate their freedom to a power to alter the operation of statute law to suit themselves or, as is more likely, to suit the interests of the party with the greater bargaining power. Where the parties have comprehensively committed the terms of their relationship to a written contract the validity of which is not in dispute, the characterisation of their relationship as one of employment or otherwise proceeds by reference to the rights and obligations of the parties under that contract. Where no party seeks to challenge the efficacy of the contract as the charter of the parties' rights and duties, on the basis that it is either a sham or otherwise ineffective under the general law or statute, there is no occasion to seek to determine the character of the parties' relationship by a wide‑ranging review of the entire history of the parties' dealings. Such a review is neither necessary nor appropriate because the task of the court is to enforce the parties' rights and obligations, not to form a view as to what a fair adjustment of the parties' rights might require." (Footnotes omitted)
Aramex Sydney accepts that the Commission should conduct an inquiry into the nature of the franchisee arrangement and may make a declaration that the relationships are a contract of carriage. Adopting the High Court's language in Personnel and Jamsek, Aramex Sydney submitted that as: 1. the parties have comprehensively committed the terms of their agreement to writing by way of a CF deed; and 2. the relationship is not a sham, and the terms and conditions of the relationship are not otherwise varied, waived or subject of an estoppel; in examining the relationship, the Commission should not look beyond the written contract. Aramex Sydney argued the written contract here is the CF deeds that exists between the CFs and Aramex Sydney. Aramex Sydney accepted that the Commission would conduct a broader enquiry of the relationship in the context of considering the TWU's submissions with respect to subs 309(3) of the Act: Aramex submissions at [53]-[76].
The TWU referred the Commission to the decision of Black J in Spitfire Corporation Limited (in liquidation) and Aspirio Pty Ltd (in liquidation) (2022) 366 FLR 225; [2022] NSWSC 340 ("Spitfire"). In Spitfire, the Court was required to determine the "true employer" of 42 employees who had outstanding entitlements owed to them in the context of proceedings under Pt 5.6 Div 6 of the Corporations Act (2001) (Cth).
In Spitfire, it was argued by Resilient Investment Group Pty Ltd ("Resilient"), that in determining the "true employer", inquiry beyond the employment contract (other than in cases of sham or contractual variation) was not permitted and that the Court should not otherwise embark upon an analysis of the "totality of the relationship" or the "multifactorial analysis". In advocating this approach, Resilient relied upon the High Court decisions in Personnel, Jamsek and WorkPac Pty Ltd v Rossato (2021) 95 ALJR 681; [2021] HCA 23 ("WorkPac"): [72] of Spitfire.
Justice Black rejected the narrow approach advanced by Resilient, distinguishing the case on the basis that the High Court decisions it relied upon are concerned with ascertaining the "character" or "characterisation" of the parties' relationship. Specifically, those matters dealt with whether an employee was engaged on a casual or permanent basis (in the context of Rossato) and whether a worker was an employee or an independent contractor (in Personnel and Jamsek). However, the "true employer" cases identified in the proceedings, namely Gothard (recs & mgrs of AFG Pty Ltd) (in liq) v Davey (2018) 80 ACSR 56; [2010] FCA 1163 ("Gothard") and Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125 ("Bindaree Beef") are directed to ascertaining the identity of the party by whom a putative employee is engaged. Black J described this distinction as "real", stating that, "I accept that the 'true employer' cases directed to Pt 5.6 Div 6 of the Corporations Act comprise a discrete line of authority which this Court should follow unless it is overruled by an appellate court": [74] of Spitfire.
Justice Black also concluded that the High Court decisions did not expressly or impliedly overrule the "true employer" lines of authority, "where they did not need to address and did not address the terms, functions or policy of Pt 5.6 Div 6 of the Corporations Act and the High Court did not there need to consider the implications of treating employment contracts with corporate shells, that have no assets or nominal assets and perform no real business functions, as a means of defeating employee entitlements in insolvency or shifting the liability for them to the Fair Entitlements Guarantee scheme and, ultimately, Australian taxpayers": at [76] of Spitfire.
In the decision, Black J concluded that he was bound by the appellant authority of Pitcher v Langford (1991) 23 NSWLR 142 at 161 ("Pitcher v Langford") and Bindaree Beef. He further decided that he should apply the approach taken by other judges at first instance in dealing with the specific issues before him, having concluded that these were not plainly wrong, referring to Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; (1993) 112 ALR 627; (1993) 10 ACSR 230; [1993] HCA 15.
The reasoning of Black J in Spitfire is directly applicable to these proceedings. Again, the High Court decisions were concerned with ascertaining the "character" or "characterisation" of the parties' relationship. Specifically, the cases concerned whether an employee was engaged on a casual or permanent basis, and whether a worker was an employee or an independent contractor. Although the Commission is required to consider the relationship between the parties in this matter, the nature of that inquiry is different. The requirement is to identify whether the CFs and Aramex Sydney are engaged in a contract of carriage, as defined by the Act.
There is also another important distinction between the analysis undertaken in the High Court cases and these proceedings. In this matter, the Commission is required to consider whether there is a "contract of carriage" where that phrase is statutorily defined. The principles of statutory interpretation require that in interpreting and applying the legislation, regard is had to the purpose and context of the provisions of the Act, including extrinsic materials where appropriate: see above at [32]-[34]; [40]-[41].
The TWU submitted that the Commission should adopt the same approach in these proceedings as Black J in this matter, submitting that the principles developed in the context of determining the "true" identity of an employer are germane to the present task. While those cases are useful, the adoption of those authorities is equally directed at a different question and developed without consideration of the specific statutory context of the Act.
There is no "discrete line of authority" on how to approach the task before the Commission. However, the proper approach to determining the question was considered in Couriers Please. While I am not compelled to follow that decision, the principle of comity requires that I give earnest consideration to it and I would only adopt a different course if convinced that it is wrong: see Mitchforce Pty Ltd v Starkey (No.2) [2003] NSWIRComm 458 at [17]-[18] and Health Employees' Conditions of Employment (State) Award 2018 (Infectious Cleaning Allowance) [2021] NSWIRComm 1049 at [30]-[33].
In my view, the correct approach to determining whether there is a contract of carriage requires an analysis of whether the dominant purpose of the relationship is the transportation of goods. The recent High Court decisions, Jamsek and Personell Contracting are instructive. The analysis should start with a proper consideration of the written contracts between the parties and its terms should be given primacy. However, to the extent the written contracts do not reflect the true nature of the relationship between the parties, the Commission is able and should look beyond those terms. Specifically, I am required to establish the actual purpose of the contract, not just what the contract says is its purpose. Further, and as already stated, this is not a matter of determining whether the relationship involves a contract of carriage versus a franchise arrangement. A franchise arrangement can also be a contract of carriage. A contract of carriage can also exist where Aramex Sydney acts as an agent for other entities to require the CFs to transport goods. This approach is consistent with plain words of the ss 309 and 310 of the Act and the legislative intention of Ch 6 where amendments have been made to expand the relevant definitions.

Is the arrangement between Aramex Sydney and CFs engaged by Aramex Sydney a contract of carriage?

Aramex Sydney contends that the relationship between Aramex Sydney and CFs is not a contract of carriage as defined by s 309 of the Act. In support of its position, Aramex Sydney submitted (Aramex submissions at [83]-[88]): "In the case of CF's, they contract with multiple licensees (senders and/or receivers) on any given day. Each time a parcel is picked up or dropped off a new contract of carriage is formed, each time with a new principal contractor. In the above circumstance the involvement of Aramex Sydney is simply to facilitate the movement of the packages through the Aramex Australia network, collect monies on behalf of the CF and to provide the CF with relevant support/use of the Aramex brand. Similarly, a CL is provided work by any number of RF's and CF's who have an oversupply of work, or who have exclusive territories that are not owned by a specific CF for whatever reason. Again, the involvement of Aramex Sydney in these circumstances is to facilitate the movement of packages through the Aramex Australia network, collect monies on behalf of the persons/entities involved in the process and to provide the CL with relevant support/use of the Aramex Brand. Finally, in respect of Blu's, they operate on a gig basis, taking work from any person who offers it to them. No restrictions are placed on a Blu as to with whom and when they contract to provide services. Further, Aramex Sydney submits that at its highest, even where Aramex Sydney and a CF are subject to a contract of carriage pursuant to section 309 of the lR Act, by virtue of the fact that on any given day, in the ordinary course of their business, CF's contract with a number of principal contractors for the carriage of packaged goods, the service they provide would fall within the exemption outlined in section 309(4)(b) of the IR Act." (Footnotes omitted)
It is necessary to scrutinise the true nature of the relationship between Aramex Sydney and the CFs in deciding whether to accept or reject this submission. As set out above, a relevant question is whether Aramex Sydney and the CFs have contracts, the dominant purpose of which is the transportation of goods.

CFs are contractually obliged to transport goods for Aramex Sydney

The CFs are contractually obliged to provide courier services to Aramex Sydney by the CF deeds. Clause 2.2 sets out the CFs pick up and delivery obligations. Clause 2.2(a) provides: "The Courier Franchisee covenants with the [Aramex Sydney] as agent for, and for the benefit of, each [Aramex] Licensee severally to promptly pick up or deliver, or procure the pick up or delivery of, all packaged goods contracted by the [Aramex] Licensees for pick up delivery in the Exclusive Territory during the Franchise Period."
Clause 2.2(b) provides that Aramex Sydney covenants with the CF to: "…contract as agent for the [CF]… to procure all Licensees to promptly undertake delivery during the Franchise Period of package goods contracted by the [contract driver] for delivery in the area serviced by the Network from time to time outside the Exclusive Territory."
This clause appears to allow Aramex Sydney to contract as agent for the contract driver with Licensees of the Aramex brand outside of the CFs territory and have those Licensees promptly deliver goods outside their territory.
Clause 4 deals with receipts and payments and provides that Aramex Sydney is appointed to receive in trust to the exclusion of the CF, "Franchise Receipts", meaning all monies and consideration received or receivable from the conduct of the CFs.
Clause 2.4 of the CF deed requires CFs to conduct the Franchise in compliance with the Courier Franchisee Manual ("Manual"). Aramex Sydney is able to alter the Manual at any time. Clause 2.5 provides that if the CF does not meet its obligation under the Manual or pick up and deliver freight within Aramex Sydney's expected timeframes, it is able to enter into another franchise deed or make other arrangements for the provision of courier services in the CFs territory.
Chapter 7 of the Manual is entitled "Operations". Clause 7.40 is entitled "Delivery timeframes" and imposes the following obligations upon CFs: 1. All freight is to be delivered on the day that it arrives in their bay. 2. At least 2 cycles of deliveries are to be completed each day. 3. They must return to the depot at specified times and engage in 'freight swap'. 4. They must also deliver parcels within specified timeframes, described as AM pickup = PM delivery, PM pickup = AM delivery (next day).
Where these obligations are unable to be met, the CF "may utilise [their] own employees (legally employed and paid), approved contractors, Blu couriers or CF Lite resources to assist when available." Aramex Sydney may action deliveries on the CFs behalf at the expense of the CF if parcels are not delivered on time. Mr McKenna confirmed under cross-examination that CFs who did not deliver goods in accordance with the timeframe allocated could be disciplined and sanctioned by Aramex Sydney: Tcpt, 27 June 2022, p 51 (11).
CFs are required to utilise a scanner owned by Aramex Sydney which they lease. The scanner is GPS enabled and Aramex Sydney will use the scanner to identify the location of the CF from time to time: Tcpt, 27 June, p 53 (25) -(27). CFs are required to scan all parcels they pick up.
Mr McKenna gave evidence that the CFs had to "action" all requests to pick up sent to them on their scanners. He said that they could accept the request or decline it, although his response indicated that the usual course would be for the CFs to accept the request. If the request is not actioned by the CF, Aramex Sydney arranges for another person to affect the pick up: Tcpt, 27 June 2022, pp 24 (40) - 25 (4).
The CFs gave evidence that the scanners are the means by which they are directed to transport goods by Aramex Sydney. Ms Selbik gave evidence that the only way she is able to receive work to pick up deliveries is through her scanner: Tcpt, 28 June 2022, at p 41 (44)-(48).
The obligations of a CF are explained in a disclosure document provided to them on their engagement ("Disclosure Document"): Ex R4 Tab 4. In a table headed, "10. Supply of goods or services by a franchisee" in the Disclosure Document, it is stated that (p 146 of Ex R4): "A Courier Franchisee must supply the whole range of goods or services of the franchise as specified in the Courier Franchise Deed and the Courier Franchisee Contractors Manual."
It is clear from the terms of the CF deed, the Manual, and the Disclosure Document that the CFs are contractually obliged to transport goods for Aramex Sydney. The legal source of the obligations arises through the contractual arrangements entered into by Aramex Sydney and the CFs as described above. This is so, whether Aramex Sydney acts as agent for another Licencee or not in that process.
I expressly reject the submission of Aramex Sydney above that its role is facilitative only. The role of Aramex Sydney in the delivery of goods by CFs is direct, evidently "hands on", and contractually enforceable. If the CF does not deliver goods in accordance with the contractual obligation, Aramex Sydney has the legal entitlement to enter into a new deed, effectively taking back the CFs territory.
Aramex Sydney submits that other than in respect of national customers, the "Domestic Conditions of Carriage" govern the manner in which the CF, (and RF, CF and any sub-contractor of the carrier) is engaged to pick up and deliver goods for a customer within the Aramex Network. They argued that key among the terms in the Domestic Conditions of Carriage is that the relationship that exists for the transportation of goods is one that is between the carrier and the customer: Aramex submissions at [45]-[46].
Mr Lipinksi gave the following evidence in respect of the relationship between the CFs and customers (at [27]-[29]; [60] of Ex R8): "27. Take, for example, clothing from a retail store which is based within a CF's territory in Sydney, which needs to be delivered to the purchaser of the goods in Melbourne. That CF will enter a contract of carriage with the retail store, and will pick up the goods directly from the customer. The CF will return the goods to Aramex (Sydney)'s depot, at which the package will first be sorted by the CF and then will be further sorted on the CF's behalf for interstate deliveries and placed into cages for linehaul delivery direct to the RF in Melbourne. A CF with an exclusive territory which covers the area in Melbourne where the purchaser is, will deliver the goods (or subcontract for the delivery of the goods) on behalf of the CF in Sydney. That CF could: a. determine to perform the delivery themselves; b. contract with a Blu or waive their exclusivity to permit a CL to deliver it; c. subcontract the delivery via an independent contractor; d. direct an employee of the CF to perform it; or e. request that the RF assist the CF by engaging third party contractors to meet delivery obligations (at the CF's cost). 28. The CF (as an independent business) has the discretion to determine which of the approaches noted in paragraph 27 it adopts, having regard to the needs of its business. The CF may delegate the delivery having regard to its existing pick up and delivery load, or its desire to focus its efforts on securing new customers or generating further sales from existing ones. 29. Conversely, this scenario may work in the reverse such that clothing is being delivered from a retail store in Melbourne to a purchaser based in Sydney. The CF in Melbourne would enter a contract of carriage with a retail store within its exclusive territory. That CF will pick up the goods from the retailer, and return them to the depot of the RF to which they are a franchisee. At the depot, the package will first be sorted by the CF and then will be further sorted on the CF' s behalf for interstate deliveries and placed into cages for linehaul delivery direct to the RF in Sydney. In Sydney, a CF in the relevant territory of the Melbourne clothing store's customer will make the delivery on behalf of the Melbourne CF. That CF could: a. determine to perform the delivery themselves; b. contract with a Blu or waive their exclusivity to permit a CL to deliver it; c. subcontract the delivery via an independent contractor; d. direct an employee of the CF to perform it; or e. request that the RF assist the CF by engaging third party contractors to meet delivery obligations (at the CF's cost). ….. 60. The Domestic Conditions of Carriage entered by customers who contract with RFs or CFs to deliver goods within the Aramex Network provide that the Services are performed by the Carrier on the terms set out in the Conditions. Services means the services provided by the Carrier in connection with the carriage of the Goods including (without limitation), carriage, storage, loading, unloading, packaging, unpacking, freight forwarding and all other services relating to the transport of Goods including any incidental services. Carrier means an Aramex RF or CF that has agreed to provide carriage services in respect of the Goods as specified from time to time, including any sub-contractor of the Carrier."
In summary, Aramex Sydney contends that the CF contracts with the customer in their territory for the transportation of the goods. It is their contention that beyond picking up the goods and delivering them to Chullora, the CF utilises the "Aramex System" to take all other steps associated with the delivery of the goods. Their argument is that the CF is at all times legally responsible for the transportation of the goods from pick up to destination.
The Domestic Conditions of Carriage document relied upon by the Aramex Sydney is generic. It does not contain a specific CFs or customer's information. On its face, it is unclear whether it intends to bind a CF and or the RF. In his witness statement, Mr McKenna gave evidence in response to the statement of Ms Wisniewska. He stated (at [95] of Ex R1): "When customers create their MyFastway account, they are required to check a box confirming that they have and accepted the …. Conditions of Carriage, which are hyperlinked."
Mr McKenna gave evidence under cross-examination with respect to the sign-up process for customers. He disagreed that the customer could not be aware which courier would deliver their freight for them after they signed up: (see Tcpt, 27 June 2022, p 59 (20) and p 59 (40)). He gave evidence as follows (Tcpt, 27 June 2022, p 59 (22)-(28): "Q. Where do we see that in your statement, sir? A. I'm not sure but I'm just making a point that on our sign up facility, on myFastway all the details are actually provided for the individual courier franchisee for the actual service that's going to be performed, it's all there online. So that when you sign up you've got the details of the courier franchisee servicing your territory, you have the details, you have the ABN, the ACN, the contact number and you'll have a timetable for the courier."
While he maintained that all of the details about the CF are available to the customer on sign up, Mr McKenna confirmed that these were not included in the Domestic Contract of Carriage document: see Tcpt, 27 June 2022, p 60 (23)-(42).
Mr McKenna gave evidence that the Domestic Conditions of Carriage are provided to customers when they receive a manual invoice from CFs for prepaid labels, which he described as follows (Tcp, 27 June 2022, p 82 (9)-(14)): "….So, it's a double sided document that has the individual courier franchisee's details and then, on the flip side, it has a general conditions of carriage, which doesn't stipulate 'Joe Bloggs Pty Limited', within that, but it references it on the actual - because the conditions of carriage come with the invoice. It's on the same document. So that's why I'm answering - I'm not trying to be difficult, I'm just trying to--"
Two manual tax invoices were in evidence relating to the CF company, Successful Enterprises: Ex R5 at Tab 12. On the Tax invoices, there is a space available at the top right-hand corner of the document for, "Contract Carrier details". Included in small print on the tax invoice is the following statement: "The Conditions of carriage are entered into between the Carrier [Courier Franchisee] and the Customer. A copy of the Conditions of carriage is available to view at fastway.com.au/terms-and-conditions. Please note in particular: * Carriers liability maximum $1,500 per consignment. * These Conditions of carriage are between the Carrier and the Customer and not the agency, * This business is independently owned."
Underneath this statement is space for a signature from both the CF and the customer. Underneath the customer signature there is a statement, "I confirm I've read and accept the terms and conditions". It was not clear from the evidence if all labels are purchased in this way or just some. The tax invoices in evidence do not contain the signature of the customer.
The Domestic Conditions of Carriage contained on the Aramex website provide, under the heading 'Conditions of Carriage': "These Conditions of Carriage ("Conditions") govern the supply of services undertaken by Aramex, its related entities, franchisees, subcontractor and all other nominees in relation to the carriage, storage, loading unloading, packing, unpacking, freight forwarding and all other services relating to the transport of Goods."
In the Definitions section of the Conditions of Carriage: 1. "Carrier" is defined meaning an "Aramex regional franchisee" or "courier franchisee that has agreed to provide carriage services in respect to the Goods as specified from time to time, including any sub-contractor of the Carrier." 2. "Carrier's Website" is defined as "www.aramex.com.au". 3. "Goods" are defined to mean the items provided by a customer for carriage by the Carrier or otherwise in relation to the provision of the "Services". 4. "Services" are defined to mean the services provided by the Carrier: ... in connection with the carriage of the Goods including (without limitation), carriage, storage, loading, unloading, packing, unpacking, freight forwarding and all other services relating to the transport of Goods including incidental services.
The Domestic Conditions of Carriage encompasses the full range of services associated with the transportation of goods, including aspects that are not the direct responsibility of the CFs.
Clause 3 is entitled, "Not a Common Carrier". It provides that a Carrier is not a common carrier and accepts no liability as such. It states that the Carrier may, in its absolute discretion, refuse carriage of any item for any person or provide any of the Services to a customer before or after provision of the Services has commenced. The capacity of the Carrier to refuse these services is in direct contradiction to its obligations pursuant to the CF deed as set out above.
There was no evidence from any customer about the process and their understanding and acceptance of the Domestic Conditions of Carriage with the CFs. Other than in respect of point-to-point deliveries, the CFs have almost no control or visibility of the transport of the goods beyond dropping them at Chullora and picking them up and delivering them within their territory. Aramex Sydney otherwise co-ordinates and controls all aspects of the delivery.
Aramex Sydney's evidence establishes that the processes Aramex have in place purport to bind the customers and CFs to the Domestic Contract of Carriage in the territory of pick up. However, even if these arrangements have legal effect, this does not change the fact that CFs are contractually obligated to undertake the pick up and deliver goods for customers in accordance with the CF deed and as directed by Aramex Sydney. It does not necessarily follow that because the Domestic Conditions of Carriage apply between the CFs and customers, there can be no contract of carriage as defined by the Act between Aramex Sydney and the CFs. This is consistent with the scheme of the Act where s 310 defines a principal contractor to include an entity acting as an agent for another entity.
In any event, Aramex Sydney did not contend that the Domestic Conditions of Carriage apply with respect to the work undertaken by the CFs in respect of national customers. There was also no contest that the CFs are contractually obliged by operation of the CF deed and the Manual to complete the relevant transportation services with respect to national customers. Furthermore, the obligation to transport goods at Aramex Sydney's direction where it is argued other CFs have contracted with customers is again derived from the CF deed and Manual. A practical example of this in operation is the requirement for CFs to deliver goods for a client "New Aim" where Aramex Sydney declared the rates that would be paid for the work undertaken for this particular customer, to commence forthwith: Ex A10 at pp 8-9. The contractual obligation for the transportation of goods by CFs at the direction of Aramex Sydney is strongly indicative that the dominant purpose of CF deed is the transportation of goods.

Capacity of CFs to decide how the pick up and delivery is undertaken

The parties sought to place emphasis on the capacity of the CFs to delegate their obligations under the CF deed and Manual. Aramex Sydney submitted that when a CF has an obligation to deliver a package within their territory, they are at liberty to decide how the delivery is undertaken. They submitted that the CF may: complete the delivery itself; have a Blu or a CL undertake the delivery; subcontract the delivery; direct any employee they hire to undertake the delivery; or ask the RF to assist by finding a delivery driver (an independent contractor) to undertake the delivery on behalf of the CF (and at the CFs expense): Aramex submissions at [36].
Although the CFs are able to decide how the deliveries are undertaken, Aramex Sydney retains a significant level of control in respect of who undertakes the work. Any person performing the work must be approved by Aramex Sydney: cl 3.3 and cl 1 of the CF deed defining "Authorised Driver". Further, the CF deed provides that the CF will cease to engage an Authorised Driver in particular circumstances, including if they are convicted of a criminal offence, if "in the opinion of the Franchisor, in its absolute discretion, may prejudice or jeopardise the good name of the System": cl 3.3(d).
The CF deed also requires Aramex Sydney's prior written consent for the CF to arrange for the courier services to be undertaken, at the CFs expense, by a replacement driver on an "as necessary only basis" to avoid any interruption "to the courier services" offered by the CF: cl 3.3(b). The CF deed does not provide that there is any obligation on Aramex Sydney to give their consent.
Thus, while the CF can make alternative arrangements for the transportation of goods, this is strictly controlled by Aramex Sydney who retains a significant level of discretion in approving any such arrangements. Whether the transportation work is delegated or not, the CF remains responsible for ensuring the requirements of the CF deed and Manual are met. However, the level of control retained by Aramex Sydney with respect to the delegation of the transportation of goods by the CFs is indicative that the dominant purpose of CF deed is the transportation of goods.

Payment to CFs by Aramex Sydney is contingent on goods being transported

CFs do not get paid unless they transport goods. Aramex Sydney generates invoices on behalf of the CFs to Aramex Sydney which results in the CF receiving an income. Aramex Sydney receives all of the income from customers, purportedly as an agent of the CFs when they pick up goods from their territories. Aramex Sydney arranges payment to CFs in accordance with the invoices it produces, which include a number of deductions for items such as "scanners, depot sort fee, outside hire fees, point to point services, customer limited liability claims, public liability insurance, third party platforms… and Parcel Connect": Para 11.1 of the Manual.
Paragraph 11.1 of the Manual provides that CFs are paid for their transportation services and commission at rates determined by Aramex Sydney. There was no suggestion that Aramex Sydney has anything but complete control over the rates and commissions that are paid to CFs: Tcpt, 27 June 2022, p 35; Para 11.1 of the Manual.
Mr McKenna gave evidence that Aramex Sydney set the rates and commissions in collaboration with Aramex Australia. Aramex Sydney can and has changed the rates paid to CFs from time to time: Tcpt, 27 June 2022, p 20 (11)-(20); p 22 (41)-(47). Indeed, the remuneration model applying to CFs was changed in March 2022 by Aramex Sydney: Tcpt, 27 June 2022, p 26 (15)-(17). Aramex Sydney also decided in its discretion to introduce a Fuel Levy Allowance.
Although there was evidence that CFs are sometimes consulted or have input in respect of rates applying to particular customers, it was not contested that Aramex Sydney and Aramex Australia ultimately determine how much customers are charged for using the Aramex System: Tcpt, 27 June 2022, pp 20 (33) - 21(5).
Clause 11.1 of the Manual is entitled, "Remuneration". It states that "The first invoice is Earnings" will "include the pickup fees, delivery fees and commission charged by the Courier Franchisee for courier services provided to the Regional Franchisees, plus any additional allowances." This is consistent with the obligations of the CFs to undertake delivery services pursuant to the CF deed and Manual as I have already described.
Each of the CFs invoices contains an item, "Total Amount Due for Period", with the figure payable by Aramex Sydney to the CF. The amount due is earnings for pick ups and deliveries, commissions, plus "Allowances" which includes a "Fuel Levy Allowance", minus the deductions applied.
For the period 15 November to 20 January 2021, Aramex Sydney introduced, "Peak Season Delivery Remuneration": Ex A10 at p 195. In short, it provided that CFs would be paid more if they picked up and delivered more parcels. The increased rates were subject to, "Terms and Conditions" which included a requirement that there be "increased activity in your Courier Franchise run"; compliance with "Uniforms, Scanning accuracy, on time deliveries and attempted deliveries"; and meeting "Delivery SLAs". Similarly, Aramex Sydney had previously sought to incentivise CFs with a "weekend bonus scheme": Ex A10 at pp 11-12. These bonuses or incentives were paid by Aramex Sydney to CFs. The customer did not pay these monies to the CFs.
The evidence as to the legal capacity and practice of Aramex Sydney to set pay rates, commissions, and bonus schemes in respect of the transportation of goods, is a strong indicator that the dominant purpose of the contract between CFs and Aramex Sydney is the transportation of goods. The fact that the CFs are only able to derive an income by transporting goods and earning commissions by operation of the CF deed and Manual is also indicative that the dominant purpose of the contract is for the transportation of goods.

Attracting and retaining customers, dealing with complaints, vehicle and livery requirements

The parties submitted that a range of other features of the relationship between Aramex Sydney and the CFs impact upon the Commission's determination of whether there is a contract of carriage. These included the requirement to attract and manage customers within the Aramex System, the obligations with respect to the age and presentation of vehicles, and how CFs present themselves and the Aramex brand through their operations.
The CF deed and Manual demonstrates Aramex Sydney has a high level of control over the manner in which the CFs conduct their operations. Aramex Sydney's capacity to control the work undertaken by the CFs is consistent with a franchising model of business. Aramex Sydney and Aramex Australia has a strong and legitimate interest in protecting and enhancing the Aramex brand. Subsection 309(2) makes clear that a franchising arrangement can also be a contract of carriage. The question remains whether the dominant purpose of the contract is the transportation of goods.

Conclusion with respect to whether Aramex Sydney and the CFs have a contract of carriage

I have decided that there is a contract of carriage between Aramex Sydney and the CFs. I consider this to be consistent with the stated purpose of the CF deed as set out in cl 1.4, and in particular to, "set out the requirements for the Courier Franchisee's operation of the Business and the Courier Franchisee's payment and other obligations": (see [22] above). The CF deed clearly deals with a range of matters, beyond the transportation of goods, such as the retention of good will in the Aramex brand. However, that does not detract from the fact that the dominant purpose of the relationship is to facilitate the transportation of goods. So much is clear from the terms of the CF deed itself. That the dominant purpose of the relationship is to transport goods is also consistent with the description given by Ms McKenna and the CFs with respect to the actual operations of the Aramex Network.
It is clear from both the contractual obligations in place through the CF deed and the Manual that there is a legal obligation upon the CFs to transport goods for Aramex Sydney. This obligation remains irrespective of who contracts with the customer. As a matter of practice, the transportation of the goods is a core aspect of Aramex Sydney and Aramex Australia's operations and they are unable to meet their obligations to other people or entities within the Aramex System without monitoring and enforcing the CFs obligation to transport goods. The system of remuneration also supports the conclusion that the dominant purpose of the contract is for the transportation of goods. The CFs only get paid if they transport goods and attract customers for that purpose.
It is also clear from the evidence that Aramex Sydney is in the business of transporting goods the CFs are required to carry. Far from facilitating the transportation of goods by others, Aramex Sydney has a central controlling role in that process and is directly involved in transporting goods itself.
Aramex Sydney submitted that even if it is found that CFs have a contract of carriage with them, the exception in subs 309(4)(b) applies. I have concluded that the exception in subs 309(4)(b) to a contract of carriage does not apply for reasons I have set out below in the context of considering if Aramex Sydney is a principal contractor: see a[123]-[125].

Is Aramex Sydney a principal contractor within the meaning of that term pursuant to s 310 of the Act?

Aramex Sydney submitted that "for the most part", it does not fit within the definition of a principal contractor pursuant to s 310 of the Act. Subsection 310(1) provides that a "principal contractor" is, subject to the section, the person for whom the carrier under a contract of carriage agrees to transport goods to which the contract relates.
Aramex Sydney submitted (at [98]-[104] of Aramex Sydney submissions): "Section 310(1) or the Act defines a principal contractor as 'the person for whom the carrier under a contract of carriage agrees to transport goods to which the contract relates.' In the present matter, the person for whom each CF is transporting goods for is an individual Licensee or (in the case or a subcontracting arrangement with a CL and/or Blu) each CF who has offered them work, or the end Customer. In this regard, Aramex Sydney submits that none of the work conducted in the Aramex network could possibly be captured by section 310 or the IR Act. In any event, the argument in respect of section 309 (specifically section 309(4)(b)) remains. What follows is that Aramex Sydney does not fall within the definition or a principal contractor within the meaning of that phrase in section 310 (1) of the IR Act. Furthermore, in respect of CF's Aramex Sydney is not a principal contractor within the extended definition of the phrase pursuant to section 310(2) of the IR Act. Even in circumstances where Aramex Sydney is acting as agent for CF's, Aramex Sydney lacks discretion by virtue of the exclusive area clauses in the CF deed to offer the contract of carriage to any other CF in the Aramex network. What follows is that as section 310(2)(c) of the IR Act is not satisfied, Aramex Sydney is not, and cannot be, a principal contractor of those CF' s. Further, or in the alternative, Aramex Sydney submits that in respect of CF's each contract of carriage is directed specifically to a specific carrier by virtue of the exclusive area clauses that exist within the CF deed, therefore Aramex Sydney is not a principal contractor by virtue of section 310(2)(a) of the IR Act."
For the reasons set out above, I have found that there are contracts of carriage between Aramex Sydney and the CFs. The CFs are contractually obliged to perform the delivery work and that duty and obligation arises out of the contractual relationship that exists by virtue of the CF deed. Further, the CFs are remunerated by Aramex Sydney on the basis of conducting that work, at rates determined by Aramex Sydney. This is so, whether the CFs contract with the customer directly, or are engaged by other CFs to conduct deliveries by virtue of Aramex Sydney acting as agent. Aramex Sydney has offered no explanation why it is not a principal contractor where CFs are delivering goods for national customers. It follows that Aramex Sydney is a principal contractor as defined by subs 310(1) of the Act.
Even if I am wrong with respect to my conclusion that Aramex Sydney is a principal contractor by direct operation of subs 310(1), I am of the view that the arrangements when Aramex Sydney purports to act as an agent for other CFs would fall within the extended definition of principal contractor as provided for in subs 310(2). I have reached this conclusion because the CF deed provides Aramex Sydney with a broad capacity to allocate work within the CFs territories: see subs 310(2)(c).
The TWU referred the Commission to Connor C's analysis of the extended definition of principal contractor in Couriers Please. In that matter, Connor C concluded the company was a principal contractor pursuant to s 310 of the Act, as follows (at p 26): "Notwithstanding the arrangements which have been put in place and the agreement which have been signed by the contract drivers, Couriers Please must inevitably adopt a coordinating role for its operations outside a specified delivery area, including intrastate and overseas operations; Couriers Please reserves the right to split up particular geographic areas permanently or provide additional assistance if, in its opinion, there is a need for that to occur; the coupons, bags and invoices are all identified as from Couriers Please and provide a telephone number of the central office; the vehicles used to carry parcels are identified with the Couriers Please logo; the couriers wear uniforms supplied by Couriers Please; and Couriers Please reserves the right to discipline the contract drivers and terminate the contract it has with the contract drivers on certain conditions. In substance, the operations of Couriers Please, as they were described in these proceedings, would still fall under s.310(1) in my opinion: if it waddles like a duck, swims like a duck and quacks like a duck, it must be a duck."
Commissioner Connor further analysed the discretion of Couriers Please to allocate work in the context of subs 310(2)(c) noting the subsection requires that the purported principal contractor retain a level of discretion to allocate work to drivers. He observed that the business model established set geographical areas for the contract drivers and provided for restrictions to service the area, "largely uninterrupted". He described this arrangement as Couriers Please "contracting itself out" of the discretion required in subs 310(2)(c) of the Act. However, Connor C ultimately found that Couriers Please was a principal contractor, noting that the company assigned the geographical areas to the drivers, reserved the right to fix boundaries or split up regions and terminate the contract if it considered the driver to be in breach of it. He concluded that the company had lawful authority to direct the businesses, even it if did not choose to do so: at p 27.
I agree with Aramex Sydney's submission that the circumstances of the arrangements in this matter can be distinguished from those in Couriers Please. In particular, the capacity of Couriers Please to split runs and alter boundaries of runs is not a feature of the CF deed.
Clause 2.1 of the CF deed states (noting Fastway should be read as a reference to Aramex): "2.1 Grant Subject to the terms of this document and the Courier Franchisee's continued compliance with its obligations under this document and the Courier Franchisee Contractors Manual, the Franchisor hereby grants to the Courier Franchisee (to the exclusion of the Franchisor and other) a licence to establish and operate the Franchise during the Franchise Period in the Exclusive Territory so that, subject to clauses 2.4 and 2.5, the Franchisor shall not itself during the Franchise period: (a) establish, or licence the establishment of, a business for the "pick up" of items for delivery by courier in the Exclusive Territory utilising the Fastway Sydney or the Fastway Objects or anything deceptively similar to them; or (b) deliver, or procure the delivery of, items picked up by Fastway Licensees for delivery in the Exclusive Territory other than by the Courier Franchisee."
By operation of cl 2.1 (a), Aramex Sydney is precluded from establishing or licensing the establishment of a business for the pick up of items for delivery in the CFs territory. It does not preclude Aramex Sydney from arranging for other contractors to perform pick up work in the area.
The obligations of exclusivity contained in cl 2.1 (a) and (b) are subject to cl 2.4 and 2.5 of the CF deed. Clause 2.4 of the CF deed provides that CFs must "strictly" comply with their obligations under the Manual, which Aramex Sydney may vary from time to time "in its absolute discretion." Clause 2.5 provides: "Non-compliance If the Courier Franchisee fails to meet and maintain its obligations under the Courier Franchisee Contractors Manual to provide Courier Vehicles to service the Exclusive Territory the Franchisor may in its absolute discretion enter into other Courier Franchisee 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 Contracts Manual subject to the terms of any other Courier Franchise Deeds granted in relation to the Exclusive Territory to that time."
The qualification that the CFs must strictly comply with the CF deed and Manual obligations for the CF to retain exclusivity of their territory is significant. This is especially so given the extensive obligations provided for in the Manual and the capacity for Aramex Sydney to change the terms of the Manual at any time. It is noteworthy that Aramex Sydney is able to make permanent arrangement for the pick up and delivery, for any breach of the CF deed or Manual by the CFs, irrespective of how trivial, and without warning.
Mr McKenna gave evidence that the circumstances in which a third-party carrier may enter the CFs territory is "very limited": Ex R2 at [113]. Mr McKenna stated that Aramex Sydney makes arrangements for the delivery and pick up of parcels in a CFs territory if the CF is unable to comply with the timeframes required for the delivery or pick up of the goods and or they have too much work: Tcpt, 27 June 2022, at p 61. When this occurs, an amount for the use of the alternative courier is deducted from the CFs remuneration: Tcpt, 27 June 2022, pp 28-29.
In respect of the capacity of Aramex Sydney to amend the CFs territories by operation of the Manual, and allocate work where there has been non-compliance within a CFs territory, Aramex Sydney submitted that the Commission should find that in reality, this has not happened and does not happen. They submitted that the suggestion should be rejected on account of it being speculative: Aramex Sydney reply submissions at [42]-[46]. This submission is inconsistent with Aramex Sydney's position that the Commission should not look beyond the parties' contractual arrangements in determining the nature of the relationship. Indeed, there is no evidence of territories being changed as a result of an amendment to the Manual or breach of the CF deed or Manual. However, what matters is the lawful authority to do so, as provided for by the contractual relationship between Aramex Sydney and the CFs: Zuijs v. Wirth Brothers Pty Limited [1955] HCA 73; (1955) 93 CLR 561 at p 571; see also Couriers Please under the heading Conclusion.
The right of Aramex Sydney to arrange for the transportation of goods to other couriers within the CFs territories is so broad that I have concluded that it has retained a discretion through the CF deeds to be able to allocate work within the CFs territories. Accordingly, the requirements of subs 310(2)(c) has been met.
Aramex Sydney also submitted that the requirement of the extended definition in subs 310(2)(a) is also not met because in respect of CFs, each contract of carriage is directed to a specific carrier "by virtue of the exclusive area clauses that exist within the CF deed." I reject this proposition. In the case of a national customer, there was no evidence that there is any contract between the customer and the CF. In circumstances where a CF is required to deliver a parcel from outside of their territory, there is no evidence that the Domestic Contract of Carriage names or identifies the CFs involved beyond the CF picking up.
Even if and when Aramex Sydney is acting as agent for other CFs in requiring the transportation of goods, it is deemed to be the principal contractor. It follows, that even if Aramex Sydney is not a principal contractor by operation of subs 310(1), it would be a principal contractor by operation of the extended definition in subs 310(2) when and if Aramex Sydney engages the CFs as an agent for other parties.
This conclusion disposes of Aramex Sydney's submission that the exclusion to the definition of a contract of carriage contained in subs 309(4)(b) applies. Subs 309(4)(b) provides: (4) A contract of carriage does not include a contract - … (b) that is made in the ordinary course of business for the carriage of packaged goods for different principal contractors by the use of the same motor vehicle or bicycle, or
Subsection 310(3) of the Act states: "(3) For the purposes of section 309 (4) (a) and (b), the carrier under a contract of carriage made as referred to in subsection (2) is to be regarded as having held himself or herself out as ready to transport the goods to which the contract relates for the person required by subsection (2) to be regarded as the principal contractor and not to have held himself or herself out as ready to transport the goods for the offerer so referred to."
It follows from my conclusion that the extended definition of principal contractor in subs 310(2) applies where Aramex Sydney distributes work as an agent to CFs, that Aramex Sydney is to be regarded as the principal contractor and the CFs are not to be regarded as having held themselves out to transport goods for any other entity.

Conclusion

For the reasons I have set out in this decision, I find that there is a contract of carriage between the CFs and Aramex Sydney. Further, I have concluded that Aramex Sydney is a principal contractor. Accordingly, the Commission has jurisdiction with respect to the industrial dispute notification filed by the TWU in these proceedings.
As a consequence of these findings, it is unnecessary to consider whether the the CF deed was entered into for the purposes of defeating, evading, or avoiding the provisions of the Act relating to contracts of carriage for the purposes of subs 309(3).
Aramex Sydney submitted that the Commission should decide whether it has jurisdiction in respect of industrial disputes between Aramex Sydney and all CFs in this motion. I have dealt with the motion based on the evidence and legal arguments before the Commission in this matter, including the evidence of the TWU's witnesses. Given my findings, I have decided not to make the orders sought in the notice of motion. The appropriate order to make given my findings is that the notice of motion is dismissed.

Orders and directions

I make the following orders: 1. The Notice of Motion is dismissed. 2. The matter is listed for conciliation in person at 10 am on 23 February 2023.

Amendments 23 February 2023 - 1. Paragraph [3], had removed "Act" and replaced with Industrial Relations Act 1996 (NSW)("Act"). 2. Paragraph [4], had removed "Industrial Relations Act 1996 (NSW)("Act") and replaced with Act. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 February 2023

Industrial Arbitration Act 1940(NSW)

Industrial Arbitration (Contracts of Carriage) Amendment Act 1983(NSW)ss 5

(CE) Industrial Relations Act 1996(NSW)

"Industrial Relations Act 1996(NSW)

[2002] NSWIRComm 1046

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