Industrial Relations Commission of New South Wales CITATION: Smartskip (NSW) Pty Ltd and Transport Workers' Union of New South Wales [2008] NSWIRComm 222 APPELLANT Smartskip (NSW) Pty Ltd PARTIES: RESPONDENTS Transport Workers' Union of New South Wales TWS NSW Pty Ltd Ready Transport FILE NUMBER(S): IRC 502 of 2008 CORAM: Harrison DP; Kavanagh J; Staff J CATCHWORDS: Appeal - Application for leave to appeal and appeal - Applications for compensation arising from termination of contracts of carriage - Maximum compensation ordered - Challenge to findings of fact at first instance - Challenge to exercise of discretion at first instance re amount of compensation awarded - No error found - Issues raised on appeal not argued at first instance - Nothing put to justify appellate intervention re award of compenation - Leave to appeal refused - Appeal dismissed - Industrial Relations Act 1996 (NSW), s 187, s 188, s 314 LEGISLATION CITED: Industrial Relations Act 1996 Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420 Austin v NF Importers Pty Ltd & Anor (2005) 146 IR 113 Box Valley Pty Ltd v Price (2000) 97 IR 484 Caltex Petroleum Pty Ltd v Harmer (1999) 92 IR 264 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 De Simone Consulting Pty Ltd v Ison (2000) 97 IR 478 CASES CITED: House v The King (1936) 55 CLR 499 Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 Metropolitan Meat Industry Board v Australian Meat Industry Employees' Union, New South Wales (1973) AR 231 Perrott v XcelleNet Australia Ltd (1998) 84 IR 255 at 265 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Strathfield Group Ltd v Hall (2002) 121 IR 158 Transport Workers' Union of New South Wales (on behalf of TWS NSW Pty Ltd and Ready Transport) and Smartskip (NSW) Ltd [2008] NSWIRComm 55 HEARING DATES: 17 November 2008 DATE OF JUDGMENT: 26 November 2008 APPELLANT Mr Y Shariff of counsel Solicitor: Mr M Diamond Workplace Advisory Group LEGAL REPRESENTATIVES: RESPONDENTS Mr AA Hatcher of counsel Mr M Aird Transport Workers' Union of New South Wales JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: HARRISON DP KAVANAGH J STAFF J 26 November 2008 Matter No IRC 502 of 2008 SMARTSKIP (NSW) PTY LTD AND TRANSPORT WORKERS' UNION OF NEW SOUTH WALES Application by Smartskip (NSW) Pty Ltd for leave to appeal and appeal against a decision and orders of Deputy President Sams given on 26 March 2008 in matter No IRC 560 and 561 of 2007 DECISION OF THE COMMISSION [2008] NSWIRComm 222 1 Smartskip (NSW) Pty Ltd ("the appellant") seeks leave to appeal and appeal pursuant to s 187 and s 188 of the Industrial Relations Act 1996 ("the Act") from a decision given by Deputy President Sams on 26 March 2008: Transport Workers' Union of New South Wales (on behalf of TWS NSW Pty Ltd and Ready Transport) and Smartskip (NSW) Ltd [2008] NSWIRComm 55. In this decision, Sams DP, pursuant to s 314 of the Act, ordered the appellant to pay TWS NSW Pty Ltd and Ready Transport ("the respondents") remuneration, equivalent to the amount the respondents earned in the six months prior to 11 July 2006, being the date that their contracts of carriage were terminated. 2 Having heard the parties and considered the extensive material relied upon at first instance, we have reached the conclusion that leave to appeal should be refused. The following are the reasons for our decision. 3 The proceedings before the Deputy President related to applications made under s 314 of the Act, which is in the following terms: 314 Jurisdiction with respect to reinstatement of contracts (1) The Commission may, after inquiry, make a contract determination with respect to the reinstatement of a contract of bailment or contract of carriage that has terminated. (2) Reinstatement of a contract includes re-engagement under a similar contract. (3) A contract determination under this section may be made on such terms and conditions as the Commission thinks fit, including provision for any period after the termination of the contract to be treated as a period of engagement under relevant contracts. (4) If the Commission considers that it would be impracticable to make a determination for reinstatement, the Commission may order the bailor to pay to the driver, or the principal contractor to pay to the carrier, an amount of compensation not exceeding the amount of remuneration of the driver or carrier under relevant contracts during the period of 6 months immediately before the termination of the contract. (5) When assessing any compensation payable, the Commission is to take into account whether the driver or carrier made a reasonable attempt to find alternative engagements and the remuneration received in alternative engagements, or that would have been payable if the driver or carrier had succeeded in obtaining alternative engagements. (6) A contract determination under this section takes effect when it is made, and is not required to have a specified term or to be published on the NSW industrial relations website. 4 The applications were commenced by the Transport Workers' Union of New South Wales on behalf of TWS (NSW) Pty Ltd (Mr Thomlinson) and Mr Sztajniger trading as Ready Transport, who had been engaged by the appellant as contract carriers within the meaning of Ch 6 of the Act. On or about 11 July 2006, the appellant terminated the engagement of the contract carriers. In the case of TWS (NSW) Pty Ltd for "refusing to carry out your duty" and in the case of Ready Transport for "your unreliability in running your business as a contractor". 5 The appellant challenged the decision primarily on the grounds that the Deputy President firstly erred in finding that the terminations were unfair, secondly in awarding six months termination pay or any compensation at all, and thirdly in failing to give adequate reasons for his findings in respect of compensation. 6 In the proceedings below, Deputy President Sams concluded: [99] Putting aside Mr Brcic's unreliable evidence, the respondent called no evidence from Mr Kamper to corroborate what Mr Brcic alleged occurred on 11 or 12 July. (I note, at this point, that it is unnecessary to resolve the conflict in evidence over whether the attendance of Mr Waller on site, and the applicants' dismissals, were on 11 or 12 July.) The respondent also was unable to bring testimony from Mr Born as to what representations had been made by him to Mr Thomlinson and Mr Sztajniger before they entered into their contracts of carriage. [100] In both the failure to call Mr Kamper and, notwithstanding Mr Xenos' difficulties in having Mr Born provide a statement, I am persuaded that Jones v Dunkel inferences are available, in that I would conclude that neither Mr Born nor Mr Kamper's evidence would have assisted the respondent's case. [101] That said, in my opinion, it is beyond doubt that the termination of the applicants' contracts were manifestly unfair, both substantively and procedurally. I arrive at this conclusion for the following reasons: 1. Even if I accept that the applicants had said that they and the other drivers were on strike until the matter was resolved, such a statement could not possibly form the basis of the almost instantaneous decision to give them letters of warning and letters terminating their contracts. In any event, I accept the applicants' evidence that they merely wished to have the matter resolved. 2. I do not accept the evidence of Mr Howard as to the number of absences of both the applicants for these reasons. Firstly, it seems plain enough that Mr Howard was ill disposed to the applicants, as the following references from his diary make clear: 1 June: Mark - Whinging about being out of fuel and looking for fuel card. 8 July: " These are all part of the games we have to constantly play with these f...... dyno subby drivers ". 12 July: Mark Tomlinson (sic) GONE!!! Mick Sztajniger GONE!!! Secondly, in cross-examination, where the applicants could remember specific absences, for illness or because of no work etc, these reasons were genuine and no fault of theirs. Thirdly, it makes absolutely no sense at all, that if the applicants were bitterly complaining about no work, that they would refuse work over a three month period. In this regard, I accept Mr Sztajniger's evidence that when he was challenged and he asked the allocator for support, Mr Frisca said, " he never knocked back work ". 3. Mr Xenos' submission that the applicants had earned close to what Mr Born had represented to them, misses the point. It was not the earnings necessarily which was the problem - it was their increased costs such as rising fuel costs and the withdrawal of the petrol card. 4. Neither applicant was given sufficient warning of poor performance arising from non-attendance or refusal to work. 5. Neither applicant was given sufficient warning of the termination of their contracts. 6. Neither applicant was given any opportunity to properly defend the allegations against them, and even when Mr Sztajniger challenged the allegation that he was unreliable by producing the allocator, who said that " he never knocked back work ", this explanation was completely ignored. 7. The said reasons for the termination of the applicants' contracts had no basis in fact. 8. The respondent denied the applicants their legitimate and legal right to have their Union involved in negotiating their claims on their behalf. 9. The respondent refused to recognise Mr Waller as the applicants' accredited Union representative and refused to meet with him to discuss the applicants' claims. 10. The termination of the contracts was not only unfair, but the Company also breached the contract by not observing subclause (b) of Clause 17, which requires five days notice of any rectification to a failure "to observe or comply with any operational procedures or instructions issued by the Company from time to time". It was the respondent's own evidence that it directed the drivers back to work and they failed to comply with such a direction. In my view, the terms of the contract, referred to above, required the Company to give five working days notice of its intention to terminate the Agreement. It did not do so. [102] As I find the termination of the applicants' contracts of carriage unfair, the question then arises as to what relief should be ordered by the Commission. The applicants have not sought reinstatement of their contracts and seek compensation pursuant to s 314(4) of the Act. This section requires a finding of the impracticality of reinstatement. I consider that the reinstatement of the contracts of carriage would be impractical, not only because the relationship between Mr Brcic and the drivers was strained to say the least, but the real impracticality arises in that both applicants have sold their trucks. [103] In the alternative, Mr Aird contended that the termination of the applicants' contracts was at the higher end of a scale of unfairness and the maximum compensation should be ordered. I would agree. 7 For the purposes of the appeal, the appellant was content to rely upon the evidence given and admissions made by the contract carriers. 8 The claims advanced by Mr Y Shariff of counsel, who appeared for the appellant, included, amongst other matters, that the Deputy President erred in failing to find that the contract carriers were engaged in unlawful industrial action; that the contract carriers had engaged in repudiatory conduct which entitled the appellant to terminate the contracts; that the Deputy President erred in finding that the terminations had no basis in fact; that the Deputy President erred in finding that there was insufficient warning given to the contract carriers prior to the terminations; that the Deputy President erred in finding that the appellant failed to observe the requirements of cl 17(b) of the contracts and that in light of each of the above errors, the Deputy President erred in finding that the terminations were unfair. 9 It was also submitted that Sams DP failed to take into account the conduct of the contract carriers when determining the appropriate level of compensation. The appellant also contended that the Deputy President failed to consider the operation of s 143 of the Act, together with s 343(1)(e) which prohibits a principal contractor from providing remuneration or other financial benefits to a contract carrier in respect of a period of industrial action. In support of the ground that the Deputy President failed to give adequate reasons, the appellant argued that the full extent of the Deputy President's finding on compensation were confined to [103] of his decision (set out above). 10 The case advanced by Mr AA Hatcher of counsel, who appeared for the respondents, was that leave to appeal should not be granted in this case. Firstly, it was observed that this was an appeal from a discretionary decision made under s 314 of the Act. Counsel submitted that the discretion conferred by the section is in wide and almost unrestricted terms, only being limited by the subject matter and the objects of the Act. This, so it was submitted, affords the decision-maker considerable latitude as to the choice of the decision to be made: see Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [19]. We agree with this submission. 11 Counsel submitted that the appellant did not argue that Deputy President Sams erred in respect of the principles found in House v The King (1936) 55 CLR 499 by not taking a relevant matter into account. The Deputy President took the alleged industrial action "issue", to the extent it was raised at all, into account at [101](1). As the appellant conceded it was submitted that the Deputy President took the matter at its highest as against the contract carriers and determined not to give it weight having regard to the other relevant circumstances, that being, a legitimate and rather unremarkable exercise of a broad discretionary power. 12 Secondly, the respondents submitted that the appellant was seeking to run a substantially different case on appeal to the case it ran below in attacking the decision of the Deputy President on the basis of arguments which were not squarely raised below in a way which would ordinarily lead to the refusal of leave to appeal. These matters included that the Deputy President had erred in failing to find that the contract carriers had engaged in unlawful industrial action, although no submission that such a finding be made was put below; that the Deputy President failed to find that the contract carriers had engaged in repudiatory conduct, which entitled the appellant to terminate the contracts. Again, no submission that a finding should be made in those terms was put below, nor was the Deputy President taken to any of the authorities now relied upon by the appellant; that the Deputy President made an error of law in that he failed to have regard to cl 17(a) of the contracts. Counsel submitted that the appellants below never identified, let alone took his Honour to that clause of the contracts. This was so, notwithstanding that his Honour directly asked the appellant "under what provision did the company purport to terminate the contracts?" A question which was never met with a direct answer; that the Deputy President erred in finding that there was insufficient warning given to the carriers prior to termination. The appellant conceded below that certainly with the benefit of hindsight a greater amount of warning should have been given to the contractors that their actions might lead to the termination of their contracts; that the Deputy President erred in failing to consider the operation of s 143 of the Act and the purpose, objects and legislative policy which underline that section. Mr Hatcher observed that s 143 considerations do not arise from the order for payment of compensation of an amount equal to the earnings in the six month period prior to termination as the contract carriers did not receive any payment from the appellant for any period of alleged "industrial action". It followed therefore that the orders did not involve any compensation for any such period. A submission that s 143 be taken into account in the assessment of compensation was not made by the appellant in any form below. Accordingly, leave to appeal in respect of this issue is refused on that basis alone. 13 It was further submitted that the respondents contended below that the work performed by the contract carriers was work to which the Transport Industry - General Carriers Contract Determination ("the Determination") applied and that the rates being paid by the appellant were, at the time of the termination, significantly below the Determination's minimum rates. It followed, so counsel submitted that a contractual requirement to perform work at under Determination rates could neither be effective, nor lawful. It follows that the relevant effect of s 406 of the Act is to render of no effect the provisions of contracts of engagement to the extent that they provide less favourable benefits than under an applicable contract determination. 14 In respect of the quantum of compensation awarded by the Deputy President, it was submitted that the challenge was nothing more than an invitation to the Full Bench to re-exercise the discretion already exercised by the Deputy President. No appealable error was clearly identified in this respect. Consideration 15 It is well settled that leave to appeal will never be lightly granted and not when the issues raised on appeal were not argued at first instance. An appeal bench is ultimately concerned with correction of error. See Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at 381; Perrott v XcelleNet Australia Ltd (1998) 84 IR 255 at 265; De Simone Consulting Pty Ltd v Ison (2000) 97 IR 478 at 482; Caltex Petroleum Pty Ltd v Harmer (1999) 92 IR 264; Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420 and Strathfield Group Ltd v Hall (2002) 121 IR 158 at [45]. 16 Some issue of real significance in the interest of justice will need to be identified for such an application to succeed: Austin v NF Importers Pty Ltd & Anor (2005) 146 IR 113 at [4]. 17 The case for the appellant essentially involved a challenge to the findings of fact by the Deputy President. We have examined these contentions but they do not, in our view, amount to a sufficient basis for the grant of leave. We adopt, in this matter, the statement by the Full Bench in Box Valley Pty Ltd v Price (2000) 97 IR 484 at [4] as follows: In any event, we think it should be emphasised, as clearly as we may, that appellate review is not available under this statute as of right, but requires the requisite degree of importance to attract leave to appeal. Mere contest as to findings of fact which might otherwise remain open on the evidence will generally, in the absence of other considerations, not attract leave. 18 We would further observe that it has long been established, in the unfair dismissal context, that the existence of lawful grounds to terminate a contract of employment does not preclude the making of a finding that the termination was unfair or the grant of relief with respect to such a termination: Metropolitan Meat Industry Board v Australian Meat Industry Employees' Union, New South Wales (1973) AR 231 at 233. Similarly, in the Ch 6 context, in our view, termination for participation in strike action may not preclude reinstatement or the awarding of compensation being granted by the Commission where unfairness had been identified in all the circumstances. 19 In our view, the reasoning of Deputy President Sams with respect to the quantum of compensation ordered (at [103]) is plain. It permits a proper review of the decision in this appeal: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 270E per Mahoney JA. The reasons at [103] must be read together with the detailed reasons given by the Deputy President at [101] with respect to the unfairness of the termination of the contract carriers. The reasons at [103] as to unfairness constitute the content for the proposition that the terminations were "at the higher end of the scale of unfairness". Given the breadth of the discretion which the Deputy President was exercising, in our view, it was open to Sams DP to give decisive weight to those unfairness reasons in determining compensation. Nothing was put by the appellant that would lead us to conclude that the amount of compensation awarded represented any kind of injustice to the appellant, that the Deputy President misdirected himself as to the appropriate amount of compensation, or that appellate intervention is otherwise warranted. The final six months of the contract carriers' engagement represents a period when they suffered declining incomes, a lack of work, and, in the case of TWS Pty Ltd, an extended period "off the road" due to mechanical problems associated with the truck sold to it by the appellant the previous year. 20 In the absence of any demonstrable error of law or principle, this is not a case which justifies a grant of leave to appeal. ORDERS 1. Leave to appeal is refused. The appeal is dismissed. 2. The stay granted by Haylen J is dissolved. 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.