Industrial Relations Commission of New South Wales CITATION : Transport Workers' Union of Australia, New South Wales Branch v Zhang & Anor [2002] NSWIRComm 223 APPLICANT Transport Workers' Union of Australia, New South Wales Branch PARTIES : RESPONDENTS Mr James Zhang Mrs Jun Hua Hu FILE NUMBER: IRC 5913 of 2001 CORAM: Marks J CATCHWORDS : Dispute notification - Alleged breach of contract of bailment - Provisions of Contract Determination held to be incorporated in contract of bailment- Held jurisdiction to make order for payment of moneys and interest - Orders made accordingly. LEGISLATION CITED : Industrial Relations Act 1996 ss332 335 343 372 379 380 Passenger Transport Act 1990 CASES CITED : Transport Workers' Union of Australia, NSW Branch v TNT Australia Ltd (unrep IRC 5103 of 1999 29 June 2000) HEARING DATES: 03/26/2002; 07/26/2002; 08/26/2002 DATE OF JUDGMENT: 09/20/2002 APPLICANT Mr A Hatcher of Counsel for the Transport Workers' Union of Australia, NSW Branch LEGAL REPRESENTATIVES: RESPONDENTS Mr Borhan as Agent Mr James Zhang - in person JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: MARKS J Friday 20 September 2002 Matter No IRC 5913 of 2001 TRANSPORT WORKERS' UNION OF AUSTRALIA, NSW BRANCH v JAMES ZHANG and JUN HUA HU Notification under s 332 of the Industrial Relations Act 1996 JUDGMENT 1 These proceedings have their genesis in a dispute notification filed by the Transport Workers' Union of Australian, NSW Branch ("TWU") on behalf of its member Craig Andersson, on 4 September 2001. The dispute notification as filed related to unpaid annual leave entitlements owed under the Taxi Industry (Contract Drivers) Contract Determination to Mr Andersson by JJJ Limo & Taxi Service Pty Ltd. Subsequently, on 10 December 2001 an amended dispute notification was filed naming James Zhang and "Mr Jun Hua Hu" as the other persons concerned in the dispute being referred to as "the bailors". In proceedings on 26 March 2002 at which the persons named as bailors were represented by an agent the proceedings were further amended to refer to the bailors as Mr James Zhang and Mrs Jun Hua Hu. 2 The dispute notification form stated that an application would be made against the named bailors under s 130 of the Industrial Relations Act 1996 ("the Act") in respect of a small claim. 3 The jurisdiction and power of the Commission in these proceedings derives from the notification of an industrial dispute made under s 332 (2) of the Act. Section 332 is in the following terms: 332 Compulsory conference with respect to disputes (1) If subsection (2) or (3) applies or the Commission has reasonable cause to believe that it applies, the Commission may summon a person to a compulsory conference: (a) to confer, or (b) to give evidence, or (c) to produce documents or exhibits, in an endeavour to bring the interested parties to a settlement which will determine the matter in relation to which the subsection applies. (2) This subsection applies if an association registered under this Chapter or a bailor or a principal contractor becomes aware of an industrial dispute that might lead, or has led: (a) to owners of public vehicles being in breach of contracts of bailment of those vehicles or refusing to enter into contracts of bailment of those vehicles, or (b) to principal contractors under contracts of carriage being in breach of those contracts or persons refusing to enter into contracts of carriage as principal contractors, or (c) to bailees of public vehicles or carriers under contracts of carriage being in breach of those contracts, or (d) to persons refusing to enter into contracts as bailees of public vehicles or as carriers under contracts of carriage. (3) This subsection applies if an industrial dispute arising from the reorganisation of the business of a principal contractor affects, or is likely to affect, the number of carriers used by the principal contractor or their remuneration. (4) At a compulsory conference, the Commission is to investigate the merits of the matter concerned, irrespective of whether or not industrial action is taking place. (5) If the Commission considers that: (a) the public interest is, or could be, affected by a question, dispute or difficulty referred to in subsection (2) or (3), and (b) all reasonable steps have been taken to resolve the industrial dispute by conciliation, it may make a contract determination expressed to be an interim determination made under this subsection. (6) An interim determination made under subsection (5): (a) is, as far as practicable, to restore or maintain the conditions existing between the parties immediately before the occurrence of the events giving rise to the industrial dispute, and (b) is to remain in force for such period, not exceeding one month after its making, as is specified in it 4 The original dispute notification and the amended notification both stated that an application would be made under s 130 for an order against the bailors in respect of a small claim. The reference to s 130 is incorrect and should have been a reference to s 380 of the Act. Section 380 is in the following terms: 380 Small claims during other Commission proceedings (1) An industrial organisation may, during any proceedings before the Commission, make an application for an order under this Part and for the application to be dealt with under section 379 (Small claims procedure). (2) Such an application may be made only if the order is sought against another party to the proceedings. (3) The Commission must not deal with the matter until the party against whom the order is sought is given adequate prior notice of the application and an opportunity to be heard on the application. (4) The Commission may deal with the matter even though it is not constituted as the Commission in Court Session. (5) The Commission may, instead of dealing with the matter, remit it to an industrial court constituted by an Industrial Magistrate for determination. (6) An order made in accordance with this section is to be made separately from any other order in the proceedings. 5 It will be seen that s 380 refers in turn to s 379 which is in the following terms: 379 Small claims procedure (1) A person who makes an application to an industrial court for an order under this Part may request that the application be dealt with under this section. (2) An application that the industrial court decides to deal with under this section is called a small claims application . (3) The maximum amount that the industrial court may order an employer to pay on a small claims application in respect of any one employee is: (a) except as provided by paragraph (b)—$10,000, or (b) if some other amount is prescribed by the regulations for the purposes of this section—that other amount. (4) The industrial court is not bound by the rules of evidence when dealing with a small claims application, but may inform itself of any matter in such manner as the court thinks fit. (5) A party to proceedings on a small claims application may be represented by an agent, but is not entitled to be represented by an agent who is a practising legal practitioner unless the industrial court so approves. That approval is not to be given unless: (a) all parties to the proceedings agree, and (b) the industrial court is satisfied that the parties (other than the party who applies for approval) or any of them will not be disadvantaged. (6) The approval of the industrial court to be represented by a practising legal practitioner is not required if the practitioner: (a) represents a corporation and is an officer of the corporation within the meaning of the Corporations Law , or (b) represents an owners corporation constituted under the Strata Schemes Management Act 1996 and is one of the proprietors or lessees constituting the owners corporation, or (c) represents a member of an industrial organisation and is an officer or employee of the organisation, or (d) represents a member of a State peak council and is an officer or employee of that council. (7) The approval of the industrial court to be represented by a practising legal practitioner may be given subject to such conditions as the court considers reasonable to ensure that any other party to the proceedings is not disadvantaged by the practitioner appearing in the proceedings. (8) A contravention of subsections (5)–(7) does not invalidate the proceedings or any order made in those proceedings. 6 Section 332 of the Act occurs within Chapter 6 which deals with public vehicles and carriers and, relevantly for the purpose of these proceedings contracts of bailment of taxicabs. By s 343 a number of provisions of the Act are applied to and for the purposes of Ch 6 including the provisions of Ch 7 in which ss 379 and 380 appear. 7 When the proceedings were originally instituted they were considerably delayed by reason of the failure of the respondent initially described as JJJ Limo and Taxi Service Pty Ltd and later described as James Zhang and Jun Hua Hu to appear. It was necessary for the Industrial Registrar to issue a formal summons to confer and to have it served personally on Mr Zhang. During the course of the proceedings Mr Zhang has appeared personally and he and his wife have also been represented by an agent Mr Borhan. 8 An affidavit of Mr Andersson was tendered in the proceedings. It was the evidence of Mr Andersson that in early May 1997 he went to a Volume Plus Service Station in Botany Road Waterloo and asked to speak to the manager of the taxis operating at that base. He was told that he had to speak to Mr Zhang. He then spoke to a man who identified himself as James Zhang who said that he had a car available and asked when Mr Andersson could start. He said: "I reported to Mr Zhang a couple of days later and he took my personal details along with driver authority number. He also directed me where to make the pay-ins every evening. He also said words to the effect of: 'If there are any problems with the car or you want to change or cancel shifts ring me.' He gave me his home and mobile telephone numbers." Mr Andersson said that Mr Zhang had a small portable office at the service station where he reported to him when he arrived to commence work which was generally six nights per week. He spoke to Mr Zhang about problems with the vehicle and the changing of shifts. Occasionally he also spoke to Mr Zhang's wife when Mr Zhang was not present. 9 Mr Andersson also gave evidence as to the identity of the taxis bailed by him and the dates and times of each occasion on which he bailed a taxi through Mr Zhang. 10 The particulars of the small claim which accompanied the amended application showed an amount of $4,867.50 owing to Mr Andersson for non-payment of annual leave pursuant to the provisions of the Taxi Industry (Contract Drivers) Contract Determination. The respondents have not challenged these calculations. In addition the TWU has claimed interest under s 372(4) of the Act. The amount owing by way of interest to 27 March 2002 as calculated by the TWU was $1,517.67. The respondents have been advised of these calculations. During the course of proceedings on 26 March 2002 I told Mr Borhan who then appeared as agent for the respondents that the TWU would forward to them within seven days details of the manner in which the interest claimed had been calculated and indicated that if the respondents wished to dispute the amount of interest they should make contact with my Associate so that the matter might be relisted. No contact has been received from the respondents. 11 I am satisfied that the Commission has jurisdiction and power to make an order for the payment of money under s 379 of the Act. 12 There exists an industrial dispute of which the TWU as an association of contract drivers registered under s 335 of the Act is aware which has led to owners of public vehicles being in breach of contracts of bailment. 13 There was evidence in the proceedings that the taxicabs which were bailed by Mr Andersson were in fact bailed from Mr Zhang. There was further evidence that some of these vehicles were owned by Mr Zhang and his wife Jun Hua Hu. 14 Notwithstanding the reference to "owners" in s 332(2)(a), I accept submissions made by Mr A Hatcher of counsel who appeared for the purpose of making submissions on this point on behalf of the TWU that reference to "owners" is in fact a reference to bailors. This is because s 332(2)(a) is directed to disputes involving or potentially leading to breach of contracts of bailment or a refusal to enter into contracts of bailment. An owner of a public vehicle who is not a bailor cannot be in breach of a contract of bailment because the owner is not a party to the contract of bailment. Accordingly, s 332(2)(a) can only have practical effect if it is construed so that the owners of public vehicles is in fact a reference to bailors. Mr Hatcher said that on his analysis every other relevant provision within Ch 6 of the Act refers to bailor and that in no other provision does the word "owner" appear. It was Mr Hatcher's submission that this drafting error had in fact been incorporated into the current Act as a carry over from a similar mistake made initially in the Industrial Arbitration Act 1940. 15 In order for the TWU to succeed in obtaining an order it is also necessary to demonstrate that there has been a breach of a contract of bailment. I expressed concern during the course of the proceedings that entitlement to annual holidays was derived from a Contract Determination made under Pt 2 of Ch 6 and there was no evidence of annual holidays being a term of or condition of the contract of bailment. If this were correct, then arguably the industrial dispute which founded jurisdiction to deal with these proceedings was one concerning a breach of the Contract Determination but not a breach of a contract of bailment. 16 Mr Hatcher submitted that the evidence concerning the provisions of the contract of bailment was such that only the barest of details were the subject of a specific reference. I have earlier referred to the evidence of Mr Andersson in this regard. 17 Mr Hatcher submitted that the provisions of the Contract Determination must be imported into the contracts of bailment as implied terms. He relied for this proposition in part on my judgment in Transport Workers' Union of Australia, NSW Branch v TNT Australia Ltd (unrep. IRC 5103 of 1999, 29 June 2000). In paras 32 and 33 of that judgment I said: "32. If I were incorrect in this approach I would nevertheless import the provisions of the contract agreement into each contract of carriage as implied terms. In doing so I have regard to the test laid down by the majority in the Privy Council in BP Refinery (Western Port) Pty Ltd v Shire of Hastings (1977) 18 CLR 266 at 283 as applied by Brennan CJ, Dawson and Toohey JJ in the High Court of Australia in Byrne v Australian Airlines Ltd (1995) 185 CLR 410. In my opinion the extensive nature of the provisions of the contract agreement including fundamental provisions such as the terms and conditions by which remuneration becomes payable leads to the conclusion that the importation of these terms are necessary to give business efficacy to each contract of carriage. Whilst I concede that the parties did not put forward any evidence or material concerning the express terms of each individual contract of carriage, I would nevertheless conclude that the provisions of the contract agreement are so extensive and so fundamental that they must be regarded as being implied into each contract of carriage absent any conclusion that the contracting parties intended them to be incorporated. 32. Accordingly, it follows that an alleged breach by the respondent of the provisions of cl 2 of the contract agreement would result in there being an alleged breach of individual contracts of carriage." 18 Mr Hatcher emphasised that the bailment of taxicabs was highly regulated and referred to the provisions of the Passenger Transport Act 1990. In addition, the circumstances in which Mr Andersson came to bail taxicabs from Mr Zhang indicated that the parties proceeded on the basis of the barest of negotiations and that the Commission could comfortably imply that the extensive provisions of the Contract Determination which covers rates of pay and working conditions of bailee taxi drivers must apply as a matter of business efficacy. 19 I accept the submissions of Mr Hatcher in this regard. 20 I am satisfied that the TWU has demonstrated that Mr Zhang as bailor has failed to pay to its member Mr Craig Andersson annual holiday entitlement under the relevant Contract Determination, that that failure has led to Mr Zhang as bailor being in breach of the contract of bailment made between him and Mr Craig Andersson and that it is appropriate in all the circumstances to make an order for the payment of moneys and interest. 21 I order that James Zhang pay to the Transport Workers' Union of Australia, NSW Branch on behalf of its member Craig Andersson the sum of $4,867.50 by way of unpaid annual leave and a further sum of interest in the sum of $1,517.67 calculated for the period 24 March 1999 to 26 March 2002. ___________________________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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