Industrial Relations Commission of New South Wales CITATION: Transport Workers' Union of New South Wales v. New South Wales Taxi Industry Association [2005] NSWIRComm 1038 APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT New South Wales Taxi Industry Association FILE NUMBER(S): 4181 of 2003 CORAM: Connor C taxi industry - occupational superannuation - standing to be a party to a contract determination - alleged failure of regulation of the taxi industry - method of calculating remuneration - problems in the taxi industry - non-compliance with contract determination - casual engagements - fare increase for taxis - attempts to provide more permanent engagements CATCHWORDS: Industrial Relations Act 1996 Superannuation Guarantee (Administration) Act 1992 (Commonwealth) LEGISLATION CITED: Superannuation Guarantee Charges Act 1992 (Commonwealth) Appeal by Haraszti against the Taxi Industry (Contract Drivers) Contract Determination (1996) 40 AILR Rep.5-105 Commissioner of Taxation v. De Luxe Red and Yellow Cabs Co-operative (Trading) Society Limited (1998) 87 IR 349 Occupational Health Nurses Superannuation (State) Award Case (1996) 85 IR 158 Rofin Australia Pty Limited v. Newton (1997) 78 IR 347 Shead v. Summit Western Pty Limited (1998) 81 IR 347 State Wage Case (2004) 132 IR 190 CASES CITED: Sydney County Council (Salaried Division) Conciliation Committee Case (1977) AR 781 Taxi Industry (Contract Drivers) Contract Determination Case (unreported) Transport Industry - Courier and Taxi Truck (Superannuation) Contract Determination Case (unreported) Vabu Pty Limited v. Commissioner of Taxation (1996) 81 IR 150 Yellow Cabs of Australia v. Coglan (1930) AR 137 HEARING DATES: 07/22/2004; 02/10/2005 DATE OF JUDGMENT: 05/04/2005 APPLICANT Adam Hatcher Counsel LEGAL REPRESENTATIVES: RESPONDENT Louise Clegg Counsel DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Wednesday, 4 May, 2005 Matter No IRC 4181 of 2003 Transport Workers' Union of New South Wales and New South Wales Taxi Industry Association Application under S.312 of the Industrial Relations Act, 1996 for variation of the Taxi Industry (Contract Drivers) Contract Determination re occupational superannuation DECISION [2005] NSWIRComm 1038 Preliminary 1 Pursuant to the provisions of Part 2, Contract Determinations, of Chapter 6, Public Vehicles and Carriers [Ss.311 to 331], of the 1996 Industrial Relations Act, two separate applications have been lodged with respect to the Taxi Industry (Contract Drivers) Contract Determination - respectively by the Transport Workers' Union of New South Wales and the New South Wales Taxi Industry Association. Those applications have been allocated to me, viz: (i) an application by the TWU seeking to provide occupational superannuation for bailee taxi drivers; and (ii) an application by the TIA concerning a range of matters: a) the adoption of appropriate procedure for the operation of E-Tags in taxi cabs (b) a cap of two years instead of six years for the recovery of accrued annual leave entitlements for bailee taxi drivers and (c) a new method for calculating annual leave, sick leave and long service leave entitlements for bailee taxi drivers based on a copy of the Business Activity Statement that they furnish to the Australian Taxation Office. Whilst the two applications are unrelated, they have been heard together (and the combined effect of them forms a significant change in the taxi industry in this State). I nevertheless deal with the two applications in separate decisions which I hand down at the same time. This decision is the first of those decisions. 2 The TWU application was mentioned before me on Friday, 22 August, 2003 and Wednesday, 29 October, 2003 and the conference required by S.315 occurred on Wednesday, 29 October, 2003. The matter was further mentioned on Friday, 5 December, 2003, Wednesday, 14 January, 2004, Thursday, 12 February, 2003 and Wednesday, 3 March, 2004. (The TIA application came before me for a mention on Thursday, 12 February, 2004 and the conference required by S.315 occurred on Wednesday, 3 March, 2004.) 3 When conciliation failed to settle the two separate applications I programmed them for arbitration. As I indicated earlier in this decision, it was convenient to deal with all issues in dispute over the two applications at the same time and I programmed the matters in that manner. The hearing was originally scheduled for Wednesday, 21 July, 2004 and Thursday, 22 July, 2004 but it became necessary to vacate the first of those two days for the hearing due to my commitment on a Full Bench. It was not possible to conclude the matter in one day, however, and I found it necessary to allocate a further day for hearing. I mentioned the matters again on Wednesday, 11 August, 2004 for programming purposes and ultimately the further hearing took place on Thursday, 10 February, 2005 with written submissions being provided subsequently by the parties. In the hearing Mr Hatcher represented the TWU and Ms Clegg represented the TIA. Annexed to this decision is a list of witnesses called to give evidence by either Mr Hatcher or Ms Clegg. 4 Mr Faruque Ahmed of the New South Wales Cabbie Welfare Association sought initially to intervene in the proceedings and had filed a document purporting to outline a position on matters before me (and other issues not necessarily open to me to consider within the ambit of these current proceedings). There is established precedent concerning Mr Ahmed's standing in this hearing. Whilst the Cabbie Welfare Association purports to represent taxi driver interests, it is not registered to do so in this State. In Appeal by Haraszti against the Taxi Industry (Contract Drivers) Contract Determination (1996) 40 AILR Rep.5-105 the Full Bench of the Commission (Cahill J - Vice President, Peterson J and Redman C) upheld a decision by me at first instance which excluded such an unregistered group of taxi drivers from the status of parties to the taxi industry contract determination, viz: "...The status as a party does not depend upon a discretionary determination by the tribunal at first instance: a person either has the intrinsic qualities of a party or has not. The person concerned, given the facts, either is entitled to be a party or is not. If the person does not qualify as a party but wishes to take part in the proceedings, then an application for intervention is available. In our view, the Commission has an inherent power to grant intervention in proceedings to persons who are ineligible for party status but are able to demonstrate a sufficient interest in the proceedings or that may be affected by their outcome in an indirect way..." The parties to these proceedings are confined to the TWU (on behalf of the bailee taxi drivers) and the TIA (on behalf of the bailor taxi owners). As I understand the position, Mr Ahmed (as distinct from the unregistered organisation he purports to represent) is a taxi driver bailee and, as such would have the status of an intervenor in the proceedings but, in any event, he did not pursue his intervention. Background 5 As background to this decision, the contract determination for taxi driver bailees has something of a 20 year history behind it in this State. There are currently two methods of remuneration recognised under it, viz: (i) a sharing of the chargeable fares - 45% for the taxi driver bailee in the first year and 50% for subsequent years [Method I]; and (ii) a fixed payment scheme whereby the taxi driver bailee retains the excess after an agreed sum has been paid to the taxi owner bailor [Method II]. In theory at least, taxi driver bailees have the option of working under either Method I or Method II. They have the right of election at the commencement of their engagement with a taxi owner bailor. Their rights in that respect are confirmed in the contract determination. 6 The TIA has consistently maintained that the taxi driver bailees work under Method II because they prefer to do so. However, the TWU position has historically been that they are forced to work under Method II. Mr Rajendra Chaudry, a TWU organiser whom Mr Hatcher called to give evidence in the proceedings, argued that the taxi driver bailees were forced to accept work under Method II by taxi owner bailors or not obtain any work as a taxi driver at all. In any event, taxi drivers in the Sydney metropolitan area are invariably engaged under Method II and Method I has, to that extent, fallen into disuse (although Mr Michael Hatrick, a taxi driver bailee whom Mr Hatcher called to give evidence in the hearing, was an exception and operated on Method I). 7 As the TIA has emphasised in its submissions, taxi driver bailees are clearly not employees. In my unreported decision of Friday, 2 May, 1997 in the Taxi Industry (Contract Drivers) Contract Determination Case [Matter No.IRC 2383 of 1995] I commented in that respect (at p.5) that: "… I accept that in a very real sense all taxi driver bailees and many bailors are partners in a business; they are businessmen working in tandem. Any profits made, or any losses that are incurred, in that business should be shared equitably between them. But also it must be recognised that taxi driver bailors own the asset on which that income is derived..." In these proceedings the TWU has attempted to draw an analogy between "employment" and the bailor/bailee relationship of taxi drivers and the owners of taxi cabs but the TIA regards such an analogy as unhelpful - and that difference in approach has highlighted the dispute between them. 8 In his written submissions in reply, provided to me on Thursday, 7 April, 2005, Mr Hatcher has accepted that the relationship of taxi driver bailees to taxi owner bailors was properly characterised as that of prime contractor and independent contractor. He referred in that respect to the decision of the former State Industrial Commission (Piddington J - President, Street and Cantor JJ) in Yellow Cabs of Australia v. Coglan (1930) AR 137 and, in particular, the comments of Street and Cantor JJ (at p.169) to the effect that the taxi drivers were not subject to the commands of the taxi operators and were, to that extent, independent and embarking on a "...joint enterprise...", viz: "...each driver was substantially an independent contractor '...who undertakes to produce a given result, but so that in the actual execution of the work he is not under the order or control of the person for whom he does it and may use his own discretion in things not specified beforehand...'..." Those comments were approved by the Full Bench of the Federal Court (Beaumont, Foster and Sackville JJ) in Commissioner of Taxation v. De Luxe Red and Yellow Cabs Co-operative (Trading) Society Limited (1998) 87 IR 349 at p.357. That effectively places the taxi driver bailees as performing the standard type of work to which Chapter 6 is addressed. 9 Also work in the taxi industry is strongly influenced by external factors, ie the setting of appropriate fare levels. Any increase in fares for taxis in New South Wales must come before the Independent Pricing and Regulatory Tribunal of New South Wales [IPART] which considers the matter and makes a recommendation on it to the Director General of the Department of Transport, acting on behalf of the State Minister for Transport, who may either accept or reject that recommendation. Mr Howard Harrison, the TIA's chief executive officer, who was called to give evidence by Ms Clegg, conceded that in the past increases to the remuneration for taxi driver bailees would flow on from a recommendation of IPART and subsequent approval by the Director General but there was no guarantee that would happen in the future. 10 Consequently, whether or not any future increase in remuneration to taxi driver bailees - and that would no doubt include any occupational superannuation levy imposed on taxi owner bailors - would be recouped by the taxi owner bailors through increased taxi fares remains in doubt. The best guess, based on past applications for taxi fare increases before IPART, is that a flow on to fares of any increase in remuneration to taxi driver bailees, ie the payment of the occupational superannuation levy, would also occur on this occasion. Clearly, the provision of occupational superannuation to taxi driver bailees would be an additional expense which IPART would need to consider. The TWU has addressed this problem to some extent in its submissions and I will deal with that issue later in this decision. 11 Mr Gordon Shaw, a taxi owner called by Ms Clegg to give evidence in the hearing, put his position forward in forthright terms: he was going broke and is getting out of the taxi industry. He does not charge the maximum pay-in granted by the Commission for the simple reason that he cannot do so and still attract taxi drivers to fill his shifts. In written submissions which Ms Clegg provided to me on Thursday, 17 March, 2005 she described the position in the following terms: "...The reality is that the operation of market forces together with the complex regulation of the industry is putting enormous pressure on operators, squeezing them out of business on both the revenue generating side and the costs side of the business. So desperate is the situation that in some instances taxi drivers actually dictate to operators (after completion of a shift) what they are prepared to pay for a shift despite earlier agreement as to the pay-in amount..." A most unsatisfactory situation - but one at odds with the evidence adduced from Mr Hatcher's witnesses who seem to me to be suggesting that taxi drivers are the victims of current problems in the taxi industry. Suffice it to say, that there are problems in the taxi industry from both sides and the current application for occupational superannuation for taxi driver bailees is only a drop in the bucket. 12 Mr John Bowe, a former executive director of the TIA, who was called to give evidence by Ms Clegg, expressed some concern that, as he saw the position, the contract determination for taxi driver bailees was honoured more in the breach by both taxi driver bailees and taxi owner bailors and that there was a real problem for the taxi industry to address to ensure compliance with the contract determination. Mr Bowe appears from his evidence to not necessarily be convinced that the lengthy period of regulation of the taxi industry in this State through Chapter 6, and the contract determination that has flowed from it, has been successful. In a sense, Mr Bowe is advancing the depressing argument that because of the obligations placed on taxi operators in this State by the existing fee structure the taxi industry is not financially viable for them at present. Certainly, in Mr Bowe's estimation, the current contract determination for taxi driver bailees has failed to live up to expectations. 13 I have to say that much of Mr Bowe's concerns fall substantially outside the scope of the current proceedings before me and I must act within the framework of Chapter 6, the contract determination which has flowed from it and, more particularly, the applications made under it which come before me. It remains essentially a matter for the parties whether the taxi industry in New South Wales should maintain its present level of regulation or whether it should be modified in some way or indeed whether the contract determination for the taxi industry should be rescinded. I note that neither the TWU nor the TIA are seeking the rescission of the taxi drivers contract determination. It must follow that it is very much in the hands of the parties involved in the taxi industry to make the contract determination work. 14 As I understand the position, the taxi industry is currently largely dependent upon a pool of casual workers. That level of casual taxi drivers fluctuates according to the levels of unemployment in the country, ie when levels of unemployment are high, there tend to be more taxi drivers available for work and when, as is the case currently, levels of unemployment are lower, there is less likelihood for the taxi industry to be able to recruit staff. Mr Bowe summarised the position in his evidence in forthright and somewhat disturbing terms, viz: "...In my experience it is the case that very few drivers join the taxi industry with a view to establish a secure career path. Rather, most drivers join the industry to fill a gap between jobs or as a means by which to earn income which they do not want to declare, for example because they seek to avoid their income tax obligations or seek to avoid declaring their income for another reason, such as having a second job or hiding income from a former spouse or because they are on social security benefits and seek to make money in addition to the benefits they receive without declaring such monies. In my view this is a profile of a solid proportion of taxi drivers..." Mr Bowe claimed that current recruitment problems in the taxi industry have been exacerbated with the Goods and Services Tax. Casual workers who would otherwise be prepared to drive taxi cabs for a living have not necessarily found the new taxation regime attractive, compounding the shortage of taxi cab drivers currently. 15 At the present time, largely Mr Bowe asserts, as a result of the introduction of the GST, many taxi drivers engaged on a casual basis have opted out of the work in the taxi industry. The evidence of Mr Bowe suggests to me that the taxi industry has had an unhealthy reliance on the so-called "black economy" - one reason, to my mind, to provide through Chapter 6 a higher level of job security and stability than presently exists. The contract determination for taxi drivers is one method, and an important one, in my opinion, to "...clean up the taxi industry..." from those unsavoury practices which are in the interest of no-one, certainly not the community in general. 16 As I perceive the TIA's position, it sees benefit to the members it represents in the taxi industry from any measure which would encourage a level of stability and permanency in the workforce for the taxi industry - and in the process eliminate the current reliance the industry has on casual engagements as taxi drivers. I believe that to be an agreed position between the TWU and the TIA. I share that view. Nevertheless, the TWU and the TIA differ in how to give effect to such a position of establishing more stability and permanency in the taxi industry - and, indeed, as far as Mr Bowe is concerned, whether it is achievable at all. 17 My task is clear, however: the continued operation of the contract determination for taxi driver bailees, of course, is perfectly consistent with my charter in these proceedings. The objects of the Act set out in S.3 include, among other things, a direction to me to (i) provide "…a framework for the conduct of industrial relations that is fair and just…", (ii) encourage "…participation in industrial relations by representative bodies of employees…" and "…responsible management and democratic control of those bodies…" and (iii) facilitate "…appropriate regulation of employment through awards, enterprise agreements and other industrial instruments…" How much of this type of regulation may survive in future it is impossible to say in the light of foreshadowed Federal moves against the State industrial jurisdiction in general. But it seems to me that there are benefits for all concerned - certainly the general public - with any measure that promotes some stability in the taxi industry. And I doubt that stability would be assisted if the current level of regulation were undermined. The TWU Claim for Occupational Superannuation 18 I now turn to consider the TWU application for occupational superannuation for taxi driver bailees. That application was amended by the TWU during to the course of the hearing of the matter. It seeks that a new provision for occupational superannuation be inserted in the taxi drivers contract determination. Mr Hatcher summarised the TWU claim, in its final amended form, in written submissions supplied to me on Friday, 25 February, 2005, viz: "...The TWU application...would require that bailors of taxis make superannuation contributions on behalf of bailees into either the TWU Superannuation Fund or an alternative complying fund nominated by the bailee and agreed to by the bailor. The contribution amount (to be paid per shift worked) is 9% of the weekly rate of pay for annual leave purposes (as set out in Item 2 of Table 2 of Part B of the contract determination). For existing bailees, the obligation to make superannuation contributions would operate from the date of commencement of the variation or from the next fare increase, whichever is the latter - thus giving the parties an opportunity to ensure that the cost of superannuation is fully funded by an appropriate fare increase..." Clearly therefore occupational superannuation will result in, and be dependent upon, acceptance of a fare increase by IPART. But for the taxi owner bailors to obtain the benefit of any fare increase approved by IPART, including a fare increase arising from occupational superannuation, as far as those taxi driver bailees working on Method II are concerned, a further application would need to be made by the TIA to the Commission on behalf of taxi owner bailors for a flow on of the fare increase. The flow on is not automatic. 19 The TWU proposal takes the following form: "...For each occasion that a bailee bails a taxi the bailor shall make a contribution on behalf of the bailee into the TWU Superannuation Fund...or an alternative complying fund nominated by the bailee and agreed to by the bailor. Such an alternative fund must be in place no later than eight weeks after the commencement of the bailee's engagement. Where there are no alternative fund arrangements in place eight weeks after the commencement of this determination, the fund shall be the TWU Superannuation Fund. In addition...the rights conferred by S.124...shall apply. The amount of the contribution by the bailor shall be calculated in accordance with the following formula: C = (A / 5) x P Where: C = contribution amount paid per shift A = amount specified in Item 2 (Annual Leave Pay) of Table 2 - Other Rates and Allowances of Part B - Monetary Rates of this determination. P = the percentage amount of 'ordinary time earnings' as specified in subclause 3(c)(i)(2) of Clause 3, Contributions of the Transport Industry (Superannuation) State Award..." The taxi owner bailor shall be obliged to pay the contribution at the end of each calendar month to the trustee of the fund, provided that the bailee has completed an application to become a member of the fund, been accepted by it and has been advised of that fact by the fund management. Jurisdiction 20 Occupational superannuation receives statutory recognition in S.124, viz: "(1) If an industrial instrument requires an employer to pay contributions to a specified superannuation fund for the purpose of providing superannuation benefits to or in respect of an employee of the employer, the required contributions, may, despite the industrial instrument, be paid to a complying superannuation fund nominated for the time being by the employee and approved by the employer. (2) However, subsection (1) applies only if: (a) the nomination of the complying superannuation fund by the employee is in writing and signed by the employee, and (b) the employer has given the employee a copy of the nomination and written notice of the employer's approval of the nomination, and (c) the employer retains a copy of the nomination. (2A) An employee may, by notice in writing, revoke a nomination under this section. (3) In this section: 'complying superannuation fund' means a superannuation fund within the meaning of the Superannuation Industry (Supervision) Act, 1992 of the Commonwealth. 'superannuation fund' has the same meaning as it has in the Superannuation Industry (Supervision) Act, 1992 of the Commonwealth." 21 I do not believe that occupational superannuation should necessarily be restricted to employees alone. Neither does Mr Hatcher who in his final written submissions has commented as follows: "...Compulsory superannuation has spread well beyond applying to just persons who are employers and employees at law, both by legislation and industrially. The 1992 Superannuation Guarantee (Administration) Act provides that compulsory superannuation also applies to persons who work under a contract that is wholly or principally for the labour of the person, even if not employees at law: S.12(3) [see Vabu Pty Limited v. Commissioner of Taxation (1996) 81 IR 150 at pp.152 and 153]. Industrially, superannuation has been extended to wide categories of contract couriers...and waterfront carriers. Therefore, there is nothing novel about extending compulsory superannuation beyond employees at law. Superannuation is now a deeply entrenched standard benefit for workers of all descriptions in Australia... Nor is there anything novel about extending employee-type benefits to taxi drivers. The contract determination already provides that permanent drivers are to receive annual leave, long service leave and sick leave at rates of pay intended to reflect those of employees. Historically, the industrial approach has been, except as to their method of remuneration for work performed, to mimic as far as practicable the standard conditions applying to employees generally..." 22 In my unreported decision of Thursday, 4 November, 1999 in the Transport Industry - Courier and Taxi Truck (Superannuation) Contract Determination Case [Matter No.IRC 5280 of 1998] I determined that occupational superannuation should be provided to contract courier and taxi truck drivers. The pivotal argument at that time by principal contractors was to the effect that occupational superannuation did not constitute "remuneration" for the purposes of S.313 and was therefore not something with respect to which I may effectively make a contract determination, viz: "...The Commission may inquire into any matter arising under contracts of carriage and may make a contract determination with respect to remuneration of the carrier , and any condition, under such a contract..." I took the view that occupational superannuation was a tangible benefit. The word "remuneration" had not been confined by the Commission to salary or wages for employees in S.83(1)(b), for instance [ Shead v. Summit Western Pty Limited (1998) 81 IR 347 and Rofin Australia Pty Limited v. Newton (1997) 78 IR 78]: consequently, it was my decision that occupational superannuation should not be excluded in the context of S.313 for contract drivers. 23 In the Transport Industry - Couriers and Taxi Truck (Superannuation) Contract Determination Case I commenting (at pp.39 and 40) as follows: "...It has long been established that superannuation is one of the matters which may be incorporated in State awards for the employees covered by them [the Sydney County Council (Salaried Division) Conciliation Committee Case (1977) AR 781]. It was...covered by the wage fixation principles...subsequently adopted in the State industrial jurisdiction. I note in that connection (the Full Bench of the Commission (Bauer and Schmidt JJ and French C) in the Occupational Health Nurses Superannuation (State) Award Case (1996) 85 IR 158 accepted (at p.159) that: '...the classes of employees to which the existing superannuation awards apply are, in the main , classes of employees within the terms of the Superannuation Guarantee (Administration) Act, 1992 (New South Wales) and the Superannuation Guarantee Charges Act, 1992 (New South Wales)...'. The words I have emphasises - in the main - suggest that there are employees, and existing State awards covering them, which are not dependent upon the SGA. And, indeed, if there is any doubt on the matter, S.124 makes it plain that superannuation is an issue legitimately falling within jurisdiction. The scheme of S.313 seems to me to suggest a similar concept for contract determinations under Chapter 6 for contract couriers. On the evidence before me...some contract couriers already currently receive superannuation contributions from their principal contractors or have done so in the past, whatever has been said about it in the SGA..." 24 As I understand Ms Clegg's submissions, that view has not really been challenged by the TIA: it has accepted my jurisdiction under Chapter 6 to make a contract determination for occupational superannuation for taxi driver bailees and it agrees that it is appropriate that provision should be made for taxi driver bailees to fund, or at least partly fund, their retirement. But it submits that I should not exercise my discretion by inserting a provision for superannuation entitlements in the contract determination for taxi driver bailees, claiming that such matters should remain in the hands of the taxi driver bailees themselves. The Submissions of the Parties 25 The TWU asserts that the payment by employers of superannuation contributions for employees (9%) is a standard State award benefit, confirmed by current wage fixation principles [2004 State Wage Case (2004) 132 IR 190 at pp.216 and 217] and it should also apply to contract drivers, ie taxi driver bailees. The contract determination for taxi drivers already provides for annual leave, sick leave and long service leave benefits to permanent drivers. The provision of superannuation benefits to taxi driver bailees will, in the view of the TWU, foster a "career" for them. The TWU points out in the grounds and reasons for its application that the taxi industry: "...has long been characterised as suffering from a high turnover of drivers with the consequent problems of low productivity, low service levels and low remuneration. In recent years it has also been characterised by a shortage of drivers. It is in the public interest, as well as in the interests of bailee taxi drivers and bailors, that bailee drivers be encouraged to stay in the industry longer, since this enhances skill levels, productivity, and the provision of high services to the general public... It is in the public interest and in the interest of the bailee taxi drivers that compulsory savings for retirement be made on behalf of bailee taxi drivers. The same considerations apply to bailee drivers in this context as apply to employees generally, including the need to relieve the pressure on public finances of the costs of retirement, and the need to enhance retirement incomes..." 26 Ms Clegg rejected the TWU claim that the provision of occupational superannuation will provide 'career drivers' for the taxi industry, asserting that external factors - the state of the economy, rates of employment, the perceived safety risks to taxi drivers, the cost of driver training and the introduction of the GST (and the reporting requirements that came with it) are the real impediments to structural problems in the taxi industry. Indeed, in her view the provision of annual leave, sick leave and long service leave has had little effect in improving the 'career' for taxi drivers and there is no reason to believe that occupational superannuation will provide any improvement either. Mr Bowe outlined in his evidence that "...very few taxi drivers entered the industry with a view to establish a career path...". Ms Clegg contends that the granting of occupational superannuation will only make matters in the taxi industry worse. 27 Mr Hatcher has argued that the evidence before me in this hearing demonstrated, almost universally, that taxi driver bailees do not presently provide for their own superannuation - principally he claimed because they simply cannot afford to do so. He asserted that to deprive taxi driver bailees of occupational superannuation was unfair, at least for those drivers who chose to make taxi driving their long-term occupation and primary source of income. For those taxi drivers, unlike every other worker in Australia, they have no retirement savings, resulting in them either retiring in poverty or continuing to work in old age. In Mr Hatcher's view (and mine), any measure that provides greater stability and long-term occupation in the taxi industry should be encouraged, not only in the interests of the taxi industry itself but for the community in general. 28 However, the TIA maintained in written submissions it provided earlier in the proceedings that: "...responsibility for making superannuation contributions (including the decision as to what fund to contribute to, how much and in what circumstances contributions should be made and the administrative burden associated with such matters) should be left in the hands of drivers. In the context of the bailment relationship and the structure of the contract determination for taxi drivers, it is unnecessary and inappropriate to impose any burden (whether financial or administrative) concerning driver superannuation on taxi operators..." In its written submissions the TIA has summarised its argument as follows: "...In the first place, the Association contends that there are matters of principle which militate against the Commission exercising its discretion to make a determination concerning driver superannuation. Further, and perhaps more importantly, the Association contends that there are a number of practical or mechanical problems with the application so as to make the proposal inherently unworkable. Finally, the proposal has significant potential to operate unfairly against members of the Association..." 29 Ms Clegg commented further in her written submissions that the TIA: "...does not dispute that it is desirable that taxi drivers should make regular superannuation contributions so that they can fund, or partly fund, their retirements. It is desirable in any modern society that all persons (whether employed, self-employed or otherwise) during their working lives be required to take some measure of responsibility for saving for their retirements. The Federal Government recognised this in 1992 when it introduced compulsory occupational superannuation for all Australian employees. However, the responsibility for making superannuation contributions (including the decision as to what Fund to contribute to, how much and in what circumstances contributions should be made and the administrative burden associated with such matters) should, as a matter of principle be left entirely in the hands of drivers..." Ms Clegg goes on to say in her written submissions that: "...there is absolutely no reason why the TWU cannot make an application to IPART to increase fares on account of driver superannuation. The Association would not oppose such a move. In this way, taxi drivers will take home additional revenue which they can then choose to allocate to superannuation (including the TWU Fund). It is simply not necessary that taxi operators become involved in the 'superannuation transaction'..." 30 Ms Clegg submitted that there would be both financial and administrative difficulties for taxi owner bailors with the TWU proposal for occupational superannuation and there is no reason why they should not be taken out of the loop. But, as Mr Hatcher highlighted in his written submissions, in the current climate in the taxi industry, if occupational superannuation for taxi drivers is left in their hands, it is very doubtful that what is intended as compulsory occupational superannuation will be anything like that - and the purpose for occupational superannuation in the first place will be defeated. For occupational superannuation the onus has always rested on the employer to make the necessary provision for his employees. I believe that onus should also rest with the taxi owners. Conclusion 31 Therefore, notwithstanding Ms Clegg's argument to the contrary, in my opinion, a case has been made out that taxi driver bailees should receive occupational superannuation entitlements - and that scheme should be administered through the taxi operators: that appears to me to be within the spirit of Chapter 6 (and the report of Beattie J - a President of the former State Commission - in 1970 on which Chapter 6 is based). I accept that the introduction of occupational superannuation for taxi driver bailees must inevitably result in a fare increase for taxis in this State. I also recognise that the provision of occupational superannuation will place an additional administrative burden on taxi owner bailors. But that is the same burden applying to all businesses, large or small, which engage employees - and taxi operators should be equated with employers in that respect at least. There are clearly benefits flowing to taxi owner bailors from any measure which adds to stability and permanency in the taxi industry. To that extent I share the views of the TWU on the matter. 32 Mr Hatcher, in his written submissions expresses the view that: "...the implementation of superannuation, although not the entire solution to the industry's problems, is a necessary first step. As a strategy of attracting drivers to work on a long-term basis in the industry, the notion of paying them entitlements in addition to the remuneration they earn from fares is not new. As Mr Bowe explained, the very same thinking lay behind the original provision in 1984 of leave entitlements in the contract determination. That this was unsuccessful was not the fault of the strategy - but rather (to use Mr Bowe's words) '...because the level of compliance with the determination (was)...so low as to render nugatory the desired effect of the 1984 determination...'. That is, leave entitlements failed to attract sufficient long-term drivers to the industry because operators, for the most part, simply did not pay them. Instead, operators have commonly entered into arrangements with drivers to trade off entitlements for lower pay-ins. This is an arrangement which trades short-term benefit for long-term loss for both drivers and operators, as Mr Bowe accepted..." I agree. The contract determination for taxi driver bailees shall be varied in terms of the TWU application to insert a provision in it for occupational superannuation in terms consistent with the TWU application. 33 Nevertheless, Ms Clegg has pointed out, accurately enough in my opinion, that the linking of occupational superannuation to a fare increase from IPART would have the effect of "double dipping" as far as the taxi driver bailees are concerned - at least in the short term. That is because those taxi driver bailees engaged on Method II would receive the benefit of occupational superannuation, paid for by the taxi owners, but the fare increase would also be given initially to the taxi driver bailees and the taxi owner bailors would not obtain the benefit of a fare increase until a TIA application could be mounted and processed before the Commission to flow it on to them. As Ms Clegg recorded in her written submissions, that is the "...real sting..." of the TWU application for occupational superannuation for taxi drivers. 34 Mr Hatcher indicated in his written submissions in reply that he sees no mechanical difficulties with the TWU application for occupational superannuation in the taxi industry. He claimed that the process was simply, viz: "...IPART increases the fares, which includes an amount x to account for superannuation; the Commission then increases pay-ins by x in response (the TWU has already made it clear it will co-operate with this adjustment); and the operator uses the extra amount x it receives to fund the payment of the superannuation contribution to the relevant fund..." But to ensure that problem described by Ms Clegg is correctly addressed I believe that the entitlement to occupational superannuation should be made contemporaneously and dependent upon the flow on to the taxi owner bailors of the share of any fare increase from IPART which reflects it. I direct the parties into discussions of that nature. I would anticipate that the variation to the contract determination and agreement on the flow on of the fare increase to provide for it would be done at the same time. 35 The contract determination shall be varied in accordance with this decision effective on and from Tuesday, 31 May, 2005 to assist in giving the parties the opportunity to implement any new procedures involved. I direct the parties to prepare the necessary documentation to give effect to this decision (and the separate decision on the application by the TIA over the operation of E-Tags and the calculation of remuneration for the purposes of annual leave, sick leave, and long service leave which I have handed down at the same time). P J CONNOR Commissioner LIST OF WITNESSES Bowe, John former TIA executive director Chaudry, Rajendra TWU organiser Coates, Geoffrey bailee taxi driver (Method II) Cole, Graeme* bailee taxi driver (Method II) Dell, Kieren financial services consultant Freeman, Mark bailee taxi driver (Method II) Harrison, Howard chief executive officer of TIA Hatrick, Michael bailee taxi driver (Method I) Jools, Michael bailee taxi driver (Method II) McMillan, William chief executive officer of the TWU Superannuation Fund Shaw, Gordon director and taxi owner (Smugs Pty Limited) Siegl, Peter bailee taxi driver (Method II) Wakeford, Roger* bailee taxi driver (Method I) * Evidence admitted without the need for cross-examination 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.