Industrial Relations Commission New South Wales Medium Neutral Citation: Application under section 320 of the Industrial Relations Act 1996 to vary the Transport Industry – Quarried Materials, &c., Carriers Contract Determination [2022] NSWIRComm 1093 Hearing dates: 28 September 2022 Date of orders: 28 September 2022 Decision date: 28 October 2022 Jurisdiction: Industrial Relations Commission Before: Commissioner Muir Decision: Determination varied Catchwords: EMPLOYMENT AND INDUSTRIAL LAW – Contracts of Carriage – application for variation to contract determination – consent position – variations ordered Legislation Cited: Industrial Relations Act 1996, s 320 Cases Cited: Application for Variations to Transport Industry General Carriers Contract Determination 2017 [2022] NSWIRComm 1029 Applications to Vary the Transport Industry - General Carriers Contract Determination 2017 [2022] NSWIRComm 1003 Transport Industry Courier and Taxi Truck Contract Determination 2017 [2017] NSWIRComm 1013 Category: Principal judgment Parties: Transport Workers' Union of NSW (applicant) Australian Federation of Employers and Industries, Australian Road Transport Industrial Organisation, Boral Transport Limited, Holcim (Australia) Pty Ltd, NSW business Chamber Limited, Hanson Construction Materials, Master Builders' Association of NSW, Australian Industry Group NSW Branch (respondents) Representation: R Rasmussen (TWU) R Kingston (NSWBC, Boral, Holcim) File Number(s): 2022/142250 Publication restriction: Nil decision 1. This matter was determined on 28 September 2022, at which time the Commission made the following orders: 1. The Transport Industry - Quarried Material, &C., Carriers Contract Determination 1991 be varied as set out in Annexure A to written submission filed by Australian Business Lawyers on 28 September 2022. 2. The file in this matter remain open. 3. Reasons for decision would be published shortly. 1. Those reasons are set out in this decision. The application 1. On 17 May 2022, the Transport Workers' Union of New South Wales ("TWU") filed an application to vary the Transport Industry - Quarried Material, &C., Carriers Contract Determination 1991 ("Determination"). On 22 August 2022 the TWU filed an amended application. 2. As set out in the amended application, the application by the TWU was for variations to the Determination to: 1. vary the cartage rate schedule; 2. respond to significant fluctuation in the price of fuel and the inability for a contract carrier to claim a fuel tax credit temporarily; 3. vary the cost component formula; and 4. vary reference to movements in the benchmarks for cost components. Background to the application 1. The background to the applications and the nature of the controversy between the parties was summarised in written submissions filed by NSW Business Chamber Limited ("NSWBC") on 17 February 2022 ("NSWBC's Submissions"). Relevantly the NSWBC Submissions set out that: B. BACKGROUND 4. The Determination was made on 20 June 1991 and applies to contracts of carriage of quarried material and to all principal contractors (other than municipal, city and shire councils) and contract carriers engaged in or in connection with such work in the State of New South Wales (excluding the County of Yancowinna). … Determination Rates 6. The Determination prescribes cartage rates for contract carriers. These are set out in Annexure A to the Determination (Rates). 7. Annexure B to the Determination contains a procedure for adjusting the Rates. Parties can apply to the Commission to adjust the Rates in accordance with a 'rise and fall formula (Formula). 8. The Formula takes into account increases or decreases in various benchmarks representing the following components of the Rates: (a) Labour; (b) Fuel; (c) Repair Parts; (d) Tyres/Accessories, (e) Registration; and (f) Other Fixed Costs. 9. The benchmarks used include modern award wages, various CPI subindexes and average fuel prices. 10. Each component is given a weighting, indicating the percentage contribution it makes towards the total Rate. 11. The increase or decrease to each benchmark is adjusted according to the relevant weighting, resulting in a percentage increase or decrease that is applied to the Rates. 12. Since the Determination was made in 1991, the Rates have been regularly amended in accordance with the Formula, usually on an annual basis. … Temporary Fuel Levy 17. Since late February 2022, there has been a significant fluctuation in the average fuel price for diesel across New South Wales as a result of external market factors, principally due to the military conflict in Ukraine. 18. The average retail price for diesel in New South Wales for the month of July 2022 was approximately $2.30 per lite (including GST), compared to $1.64 per litre in January 2022. Hearings in the application 1. The matter has come before the Commission on a number of occasions, namely: 1. 1 June 2022; 2. 30 June 2022; 3. 7 September 2022; and 4. 28 September 2022. 1. The matter was also listed for 2 August 2022, but this listing was vacated at the request of the parties. 2. At the hearing of the application on 28 September 2022, the following parties were represented: 1. TWU; 2. NSWBC; 3. Boral Transport Limited; and 4. Holcim (Australia) Pty Ltd. 1. The parties represented before the Commission reported on several occasions that they, and other parties, have been in ongoing discussions with a view to resolving the areas of disagreement between them. The NSWBC Submissions set out that: 19. Following the TWU filing its original application, the various parties have conferred with a view to agree on appropriate variations to the Determination … both to amend the [rates] and to compensate contract carriers for the sudden and unusual increase in the price of fuel. 1. Mr Kingston, of Australian Business Lawyers, who appeared for the NSWBC, advised the Industrial Registry in writing that neither The Australian Industry Group nor the Master Builders Association of NSW objected to the variations being made. Separate correspondence from the Australian Industry Group to the Registry confirmed this position. 2. From an examination of the file held by the Industrial Registry, I am satisfied that The Australian Industry Group, the Master Builders Association of NSW, the Australian Federation of Employers and Industries and the Australian Road Transport Industrial Organisation were notified of the matter and its listing on each occasion set out in [6] and [7] above. Principles to apply in determining application 1. On the issue of the principles to be applied, the NSWBC Submission was that: 21. In Application for Variations to Transport Industry General Carriers Contract Determination 2017 [1] (GCCD Decision), Commissioner Sloan varied the Transport Industry - General Carriers Contract Determination 2017 (GCCD) to introduce a temporary fuel surcharge. 22. In the GCCD Decision, Commissioner Sloan referred to his prior decision in Applications to Vary the Transport Industry - General Carriers Contract Determination 2017 and Transport Industry Courier and Taxi Truck Contract Determination [2] in which he set out the principles that the Commission should apply when dealing with applications such as the one before him. 23. These principles adopted the view of Commissioner Newall in Transport Industry General Carriers Contract Determination 2017 [3] , when he 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; and the consent of the parties to an application to make or vary a contract determination is important and relevant but is not of itself determinative. 1. I have had regard to the decision of Commissioner Sloan in Applications to Vary the Transport Industry - General Carriers Contract Determination 2017 and Transport Industry Courier and Taxi Truck Contract Determination at [7 to 12] and adopt those principles. 2. As the NSWBC Submission set out, in summary the overarching duty of the Commission is to set rates and conditions which are fair and reasonable. The consent of the parties is important and relevant, but not determinative. Submissions 1. The NSWBC Submissions on the merits of the application were: Rates 24. The proposed variations include the introduction of amended Rates (and consequential amendments to the benchmark index figures and weighting). 25. The amended Rates are calculated correctly. 26. The amended Rates have been calculated in accordance with methodology that: (a) forms part of the Determination, having already been approved by the Commission; and (b) has historically been used to review the Rates on a regular basis. Temporary Fuel Levy 27. The proposed variations include the introduction of a new Schedule 3 into the Determination, prescribing a temporary fuel levy (Levy). 28. The Levy is an additional amount, payable as a percentage of total payments made to a contract carrier. 29. The proposed variations also include procedures for calculating and updating the Levy. In summary: (a) a party must apply to the IRC to vary the Levy by the second Monday in any calendar month; (b) the new Levy is calculated in accordance with a formula that takes into account the NSW state average retail diesel price over the prior calendar month; and (c) the new Levy applies from the first of the following month. 30. The Levy: (a) is calculated with reference to the difference between actual fuel prices and the benchmark fuel price used to calculate the Rates - this means that it is proportional to the actual increase in fuel costs faced by contract carriers; (b) allows for regular review, recognising the current volatility in fuel pricing; (c) has been introduced as a temporary measure and can be varied or removed as required - this prevents repeated fluctuations to the 'base' Rates payable to contract carriers; (d) adopts a variation mechanism which allows adequate time for: (i) parties to calculate the varied Levy and apply to the Commission for a variation; (ii) the Commission to handle any applications and make the required variation; and (iii) contract carriers and principal contractors to implement the changes; and (e) operates with leave reserved for parties to apply in circumstances where principal contractors are already compensating contract carriers for fuel costs (be it by providing fuel, reimbursing fuel costs or by some other method). 31. The proposed Levy is very similar to the temporary fuel surcharge that was inserted into the GCCD as part of the GCCD Decision. Both the Levy and the GCCD's temporary fuel surcharge: (a) are calculated with reference to the monthly average fuel price; (b) may be varied on a month by month basis: (c) require approval from the IRC before taking effect; (d) apply as a safety net, and may be offset by above-determination payments; and (e) provide leave for parties to apply if already compensating for fuel elsewhere. 32. The proposed Levy is on almost identical terms to the fuel levy recently inserted into the Transport Industry - Excavated Materials, Contract Determination in a recent decision of Commissioner O'Sullivan [4] . Consent Position 33. Following consultation with all interested parties the matter is moved by consent or otherwise not opposed and this was communicated the Commission on 1 August 2022. Operative Date 34. Due to its monthly nature, the proposed operative date for the Levy is 1 October 2022. 1. Mr Rasmussen for the TWU supported these submissions. 2. I am satisfied by the submissions of parties that the amended rates set out in the proposed new table attached to the NSWBC Submission are fair and reasonable. Largely this satisfaction is based on the amended rates being calculated using the same basis as was originally used to set rates in the Determination, but with updated inputs. 3. I find reinforcement that the rates are fair and reasonable from the process whereby the applicant and respondents engaged in lengthy discussions over the rates, and then either directly supported the amendments, expressly indicated no opposition to the amended rates, or were given appropriate opportunity to make representations to the Commission and did not make any submissions. 4. I am similarly satisfied that the introduction of the fuel levy is appropriate as providing a fair and reasonable condition at an appropriate rate. 5. The detailed submission set out in the NSWBC Submissions, including the link to prior decisions of the Commission in adopting a similar fuel levy are largely the basis for this satisfaction. 6. I again find reinforcement that the fuel levy is fair and reasonable from the process whereby the applicant and respondents engaged in lengthy discussions over the fuel levy, and then either directly supported the levy, expressly indicated no opposition to the levy, or were given appropriate opportunity to representations to the Commission and did not make any submissions. 7. I note that the volatility of the price of fuel, which is one of the reasons for seeking the fuel levy, remain. Accordingly, the parties submitted that the fuel levy as sought will not fully resolve the issues between the parties on even a medium terms basis. That is, the variations do not fully resolve the issues between the parties. 8. Accordingly, the orders made on 28 September 2022 should not be taken as fully resolving the issues between the parties, and the matter will remain open should the parties wish to make further applications to amend the fuel levy. C Muir Commissioner ********** Endnotes 1. [2022] NSWIRComm 1029 2. [2022] NSWIRComm 1003 3. [2017] NSWIRComm 1013 4. [2022] NSWIRComm 1054 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: 28 October 2022