Industrial Relations Commission of New South Wales CITATION: Transport Industry - Redundancy (State) Contract Determination [2007] NSWIRComm 183 APPLICANT Transport Workers' Union of Australia, New South Wales Branch RESPONDENTS: Australian Business Industrial PARTIES: Australian Federation of Employers and Industries Australian Industry Group Hanson Construction Materials Pty Ltd Metromix Pty Ltd New South Wales Road Transport Association Rinker Australia Pty Ltd Waste Contractors and Recyclers' Association of New South Wales FILE NUMBER(S): 7121 of 2003 CORAM: Sams DP Application for new contract determination - first application for general minimum redundancy standards for carriers in the road transport industry - challenge to jurisdiction - whether contract determination can be made requiring redundancy pay to be paid to a carrier by a principal contractor - nature of contractual arrangements - statutory construction - meaning of expression 'any matter arising under a contract of carriage' and 'with respect to' - whether contract determination can impose obligations on parties after termination - origin and purpose of statutory provisions- whether minimum redundancy standards for employees should be provided to carriers - obligations to give notice, consultation and redundancy pay - differences between carriers and employees - Union's claim modified to take account of employers' concerns - nature of carriers' employment - many existing agreements and contract determinations make provision for redundancy benefits - restructuring of the industry - proportion of coverage of redundancy arrangements- carriers on fixed term contracts - permanent carriers engaged over long periods - contracts rolled over - calculation of carriers' remuneration - components of remuneration - extent of offsetting - double counting - exemptions sought - failure to provide alternative proposals - history of jurisdiction covering carriers - history of redundancy provisions in New South Wales. CATCHWORDS: Held; relevant words of the statute have wide scope - obligations arise and continue after termination of the contract - existing redundancy provisions would be invalid - problem of enforceability - rationale of legislative provisions - challenge to jurisdiction rejected - evidence largely uncontested - rare for carriers to be made redundant - redundancy arrangements for carriers not novel - existing redundancy arrangements far exceed claim - vulnerability of carriers - little difference between carriers and employees - control and direction by principal contractors - effects of redundancy similar - hardship and inconvenience demonstrated - claim seeks minimum redundancy benefits - costs to industry minimal - redundancy pay not a contingent liability - 'case by case' approach will still continue - offsetting sufficiently addressed such as to avoid double counting - concessions of Union reflected in claim - recognition of true fixed term contracts - exemptions for short term contracts - purpose of redundancy pay not defeated by reference to carriers' remuneration - risk faced by respondents in offering no alternative - focus on redundancy pay - other aspects of claim uncontroversial - Union satisfied evidentiary burden - new contract determination made - draft orders. Employment Protection Act 1982 Employment Protection Regulation 2001 Independent Contractors Act 2006 (Cth) LEGISLATION CITED: Industrial Arbitration Act 1940 Industrial Relations Act 1991 Industrial Relations Act 1996 Workplace Relations Act 1996 (Cth) Workplace Relations Amendment Act ('Work Choices') 2005 (Cth) Application for Redundancy Awards, Re (1994) 53 IR 419 Attorney General's Department of NSW v Lupcho Dafkovski [2007] NSWIRComm 94 Beck v Incitec Ltd t/as Chemtrans (1996) 86 IR 38 Clerks (State) Award & Other Awards, Re (1987) 21 IR 29 Deltec International Courier Pty Ltd v Transport Workers' Union of Australia, New South Wales Branch (1993) 50 IR 341 Exford Pines Pty Ltd v Vlado's Pty Ltd [1992] 2 VR 449 Fox v GIO Australia Limited (2002) 56 NSWLR 512 Greyhound Australia Pty Ltd v Transport Workers' Union of Australia, New South Wales Branch (1987) 21 IR 388 Health and Community Employees Psychologists (State) Award, Re (2001) 109 IR 458 Monier Roofing Limited v Transport Workers' Union of Australia, New South Wales Branch (1992) 50 IR 335 Overseas Union Insurance Ltd v AA Mutual International Insurance Co Ltd [1988] 2 Lloyd's Rep 63 Principles for Review of Awards - State Decision (1998) 85 IR 38 Roads and Traffic Authority - Owner Drivers Employment Protection Award, Re (1993) 50 IR 363 Rumsey and Another v R Clifford and Son Holdings Pty Ltd (1996) 68 IR 75 Shop, Distributive & Allied Employees' Association (NSW) & Ors v Countdown Stores & Ors (1983) 7 IR 273 Shop, Distributive and Allied Employees' Association, New South Wales and W D & H O Wills Holdings Ltd [2000] NSWIRComm 98 Solomons v District Court of New South Wales and Others (2002) 211 CLR 119 Termination, Change & Redundancy Case (1984) 8 IR 34 CASES CITED: Transport Industry - Courier & Taxi Truck (Superannuation) Contract Determination, Re (unreported, 4 November 1999, IRC98/5280) Transport Industry (General Carriers) Contract Determination - Appeal by Transport Workers' Union of Australia, New South Wales Branch, Re (1993) 46 IR 154 Transport Workers' Union of Australia, New South Wales Branch v TNT Australia Pty Ltd, IRC2030 of 2005 Westfield Holdings v Adams (2001) 114 IR 241 CONTRACT DETERMINATIONS: Boral Country - Concrete and Quarries Contract Determination [357 IG 214] Boral Resources (NSW) Pty Limited Sydney Metropolitan Concrete Contract Determination [354 IG 301] Hanson Construction Materials Pty Limited Contract Carriers Contract Determination [354 IG 272] Transport Industry - Car Carriers (NSW) Contract Determination [321 IG 264] Transport Industry - Courier and Taxi Truck (Superannuation) Contract Determination [315 IG 1] Transport Industry - General Carriers (The Smith Family) Contract Determination [286 IG 400] Transport Industry - General Carriers Contract Determination [235 IG 1611] Transport Industry - Metromix Concrete Haulage Contract Determination [348 IG 1025] Transport Industry - Quarry Materials Carriers Contract Determination [271 IG 78] Transport Industry - Readymix Holdings Pty Ltd Concrete Cartage Contract Determination [348 IG 1028] Transport Industry Courier and Taxi Truck Contract Determination [329 IG 248] Transport Industry Waste Collection and Recycling Contract Determination [335 IG 1384] AWARD: Transport Industry - Redundancy (State) Award [318 IG 458] HEARING DATES: 11 December 2006; 12 December 2006; 13 December 2006; 1 February 2007; 2 February 2007; 16 March 2007 DATE OF JUDGMENT: 2 August 2007 APPLICANT: Mr A Hatcher of counsel Transport Workers' Union of Australia, New South Wales Branch RESPONDENTS: Mr R Warren of counsel Waste Contractors and Recyclers' Association of New South Wales Metromix Pty Ltd Hanson Construction Materials Pty Ltd Rinker Australia Pty Ltd LEGAL REPRESENTATIVES: Ms V Paul Australian Industry Group Mr J Donnelly Australian Business Industrial Mr M Dunne New South Wales Road Transport Association Mr S Schmitke Australian Federation of Employers and Industries JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP Thursday, 2 August 2007 Matter No IRC 7121 of 2003 Transport Industry - Redundancy (State) Contract Determination Application by the Transport Workers' Union of Australia, New South Wales Branch for a contract determination pursuant to section 316 of the Industrial Relations Act 1996 DECISION [2007] NSWIRComm 183 TABLE OF CONTENTS Paragraph number BACKGROUND 1 CHALLENGE TO COMMISSION'S JURISDICTION 10 Consideration of the Jurisdictional Challenge 22 THE EVIDENCE 41 For the Union 42 Mr Mark Crosdale 42 Mr David Etchells 58 Mr Joe Cruickshank 64 Mr Craig Manny 73 Mr Phillip Powney 79 For the Respondents 89 Mr Anthony Clarkson 89 Mr Tony Khoury 102 Mr Christopher Wulf 107 Mr Anthony Gratland 112 Mr Nigel Ward 121 Mr Bob Mackenzie 157 Mr Geoffrey Tinney 168 Mr Terry Dene 189 Mr Paul Ryan 190 Mr Paul Cotterill 201 SUBMISSIONS 210 For the Union 210 For Australian Business Industrial .221 For Australian Industry Group 237 For Waste Contractors and Recyclers' Association of New South Wales, Metromix Pty Ltd, Hanson Construction Materials Pty Ltd and Rinker Australia Pty Ltd 247 For the New South Wales Road Transport Association 255 For the Australian Federation of Employers and Industries 260 In reply 261 CONSIDERATION 277 Chapter 6 of the Industrial Relations Act 277 History of General Redundancy Provisions for Employees in New South Wales 288 Consideration of the primary arguments 295 The Commission's findings 314 Other matters to be considered 315 ANNEXURE A - The Claim BACKGROUND 1 These industry wide proceedings have their origin in an application filed on 12 December 2003 by the Transport Workers' Union of Australia, New South Wales Branch ('the Union') pursuant to s 316 of the Industrial Relations Act 1996 ('the Act'). The relevant section deals with the making of contract determinations under Ch 6 of the Act. I shall return to these legislative provisions later in this decision. 2 For preliminary purposes it is sufficient to note that the application (and subsequent amended applications) seeks to have the redundancy test case standards of this Commission (Re Application for Redundancy Awards (1994) 53 IR 419) applied to contract carriers throughout New South Wales, through the making of a new contract determination. The application seeks, inter alia, minimum notice and consultative provisions and the payment of redundancy pay to carriers whose engagements are terminated by principal contractors. 3 This is the first occasion an application has been made to this Commission to apply general minimum redundancy provisions to carriers in the road transport industry through arbitrated proceedings. 4 The application incorporates specific modifications having regard to the particular circumstances applying in the road transport industry and was amended by the Union during the course of both the conciliation and arbitral phases of the proceedings in response to specific concerns raised by the employer respondents. The final amended application was tendered by the Union in the proceedings on 16 March 2007, and is annexed to this decision as Annexure 1. 5 In various submissions of the parties and in documents tendered, the term contract carrier is used interchangeably with terms such as subcontractor, LOD, contract driver, owner / driver, contractor or carrier. Consistent with the legislative provisions in Ch 6 of the Act, I shall hereinafter use the expression 'carrier' (as defined in s 309 of the Act) where other descriptions might appear. I also note that the term severance pay is sometimes used interchangeably with the term redundancy pay. 6 The grounds, reasons and particulars for the application may be found at Schedule B to the original application and are expressed as follows: 1. The Commission has established a test case standard for redundancy entitlements for employees covered by the Commission's awards. Consequently, most such employees enjoy the benefit of redundancy entitlements. 2. Carriers working pursuant to contracts of carriage (as defined in section 309 of the Industrial Relations Act, 1996) do not have the benefit of the Commission's test case standard for redundancy entitlements. 3. No contract determination of the Commission provides for redundancy entitlements. 4. Notwithstanding (2) and (3) above, a number of principal contractors operating in the transport industry in New South Wales provide as a matter of agreement with the Applicant or corporate policy severance benefits to carriers whose contracts of carriage are terminated on the grounds of redundancy. 5. It is not uncommon for carriers in the transport industry in New South Wales to have their contracts of carriage terminated on the ground of redundancy. 6. Any carriers made redundant by a principal contractor will typically have to face a period of unemployment before further work can be obtained. This period of unemployment is typically longer for older carriers. In this way, redundant carriers find themselves in a similar situation to redundant employees covered by awards of the Commission. 7. In addition, a carrier who has been made redundant will usually have to continue to meet the standing costs of his/her vehicle if it is intended to use the vehicle to obtain further work. The only way for the carrier to avoid this is to ell the vehicle, in which case the carrier will be unable to find further work under contracts of carriage unless a new vehicle is purchased. Thus redundant drivers typically suffer losses additional to those suffered by redundant employees. 8. In many cases, principal contractors who intend to make their carriers redundant do not consult with them, or with their union, prior to announcing their termination. This means that carriers are often totally unprepared for being made redundant, and that measures which might avoid or ameliorate such redundancies are not taken or even considered. 9. In all the circumstances, it is fair and reasonable that the Commission make a determination applicable to all carriers parties to contracts of carriage in New South Wales providing them with an entitlement to severance pay relevantly equivalent to those provided as a standard to employees covered by awards of the Commission. 10. Upon such other reasons as to the Commission seem appropriate. 7 The application came before Marks J on 4 February 2004 and was adjourned at the time to allow negotiations to continue between the parties. Pursuant to s 315 of the Act, the application was referred to me for conciliation. That process was undertaken on a number of occasions in 2005 as a result of changes in the negotiating positions of the parties and as the final positions of the parties crystallised. However, conciliation ultimately proved unsuccessful and the application was subsequently reallocated to me for arbitration. 8 The proceedings endured a hiatus period late in 2005 and early 2006 when the Federal Government's amendments to the Workplace Relations Act 1996 ('WorkChoices') were pending and the Federal Government announced a further intention to legislate in respect to independent contractors. The effect of the latter matter was said, at the time to potentially nullify Ch 6 of the Industrial Relations Act 1996. Understandably, no party wished to commit considerable resources, time and expenditure to a major industry wide case which ultimately might prove to be wasted. As events turned out, Chapter 6 of the New South Wales Act was not ousted by the terms of the Independent Contractors Act 2006 (Cth). Accordingly, this matter was re-listed on 2 April 2006 for directions and the setting of hearing dates in August 2006. At the request of the parties and due to the volume of evidence to be filed, the hearing dates were deferred on two subsequent occasions and the hearing finally commenced in December 2006. 9 It is pertinent to note, at this juncture, that the respondents who appeared in the proceedings include a number of peak employer bodies in New South Wales and some large national companies in the transport industry. However, some of the major transport companies which operate in New South Wales did not provide evidence in the proceedings. These included Toll, Patricks, Westgate, 1st Fleet and Star Track Express. CHALLENGE TO COMMISSION'S JURISDICTION 10 The first matter to be attended to at the outset of this decision is a challenge to the Commission's jurisdiction by the Australian Federation of Employers and Industries (formerly Employers' First) ('the Federation'). The Federation submitted that the proposed contract determination was unable to be made as it was beyond the jurisdiction conferred on the Commission by s 313 of the Act. 11 It is necessary to set out the provisions of section 313 which are as follows: Jurisdiction of Commission with respect to contracts of carriage (1) 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. (2) In exercising its jurisdiction under this section, the Commission may: (a) include in the remuneration of persons affected by its determination such allowance instead of annual or other holidays, sick leave or long service leave as it thinks fit, or (b) otherwise make provision for all or any of those matters. (3) The Commission may, after inquiry, make a contract determination with respect to the records to be kept by principal contractors in respect of contracts of carriage. 12 In written submissions, the Federation relied on the expression 'any matter arising under contracts of carriage' in s 313(1). It was claimed that any matter arising under the contract must owe it's very existence to the contract itself. In other words, if the contract ceased to exist then there was no power to inquire into any matter arising under it. It logically followed, it was argued, that orders providing for redundancy payments were beyond jurisdiction once the contract had been terminated (save for the specific reinstatement power found in s 314 of the Act). 13 It was said that support for this limitation on the Commission's jurisdiction to reinstate a contract of carriage which had been terminated was found in Deltec International Courier Pty Limited v Transport Workers' Union of Australia, New South Wales Branch (1993) 50 IR 341 ('Deltec') a decision which in turn relied on Greyhound Australia Pty Ltd v Transport Workers' Union of Australia, New South Wales Branch (1987) 21 IR 388 ('Greyhound'). The Federation drew a distinction with the subsequent legislative amendment to grant the Commission specific powers to reinstate a contract of carriage that had been terminated (s 314) to the original findings on jurisdiction of the Commission as to the operation of former s 91L of the Industrial Arbitration Act 1940 (now s 313 of the present Act). 14 It was further contended that the words 'arising under' were distinct to the words 'arising out of' and cannot mean a contract determination can be made subsequent to the termination of the contract of carriage: See Exford Pines Pty Ltd v Vlado's Pty Ltd [1992] 2 VR 449, and Overseas Union Insurance Ltd v AA Mutual International Insurance Co Ltd [1998] 2 Lloyd's Rep 63. It followed, the Federation argued, that the proposed contract determination involved matters that do not arise under a contract of carriage. 15 It was further put that a contract determination can only be made between two parties - a principal contractor and a carrier - acting in their respective capacities and it cannot impose conditions and obligations on those parties in circumstances where their contract had ceased to exist or operate. 16 Mr A Hatcher, of counsel for the Union, submitted that the Federation's reliance on the words 'any matter arising under' was misplaced as it is a reference to the wrong part of the statutory provision. He maintained that the Commission's power to make a contract determination, in the terms sought by the Union, arose from the words 'with respect to remuneration of the carrier, and any condition, under such a contract'. Mr Hatcher said the key words were "with respect to" and these words have the same meaning as 'in relation to'. This latter phrase was one that is wide in scope: See Solomons v District Court of New South Wales and Others (2002) 211 CLR 119. 17 Mr Hatcher drew a clear distinction between this matter and the conclusions in Deltec and Greyhound. Here, the terms of the application apply in respect to contracts which are already in force and not those which have been terminated. The words of the application, 'where a carrier is to be terminated' mean that certain obligations arise either before, or simultaneously with, the decision by the principal contractor to terminate the contract. This position is not dissimilar to redundancy payments for award covered employees which arise as a condition of employment, and are actually paid out at the termination of the contract of employment between the employer and employee. 18 Mr Hatcher pointed out that the Federation's view was totally at odds with the industry practice which already applies, in that certain company specific contract determinations currently provide for redundancy payments to carriers. He said that if the Federation's view was correct, these provisions would be beyond jurisdiction and have no operative effect. Such a view was plainly wrong as the redundancy obligations arise while the contracts remain on foot. 19 In oral submissions, Mr S Schmitke for the Federation, argued that existing agreements which contain redundancy provisions would not be rendered invalid, if his primary submission on jurisdiction was accepted. He claimed that there was nothing to prevent the Commission from approving or registering a contract agreement or determination in circumstances where sophisticated industrial parties knew exactly what they were negotiating. He said that s 315 is not dissimilar to the Commission's general conciliation powers under the Act, in particular s 174 which gives the Commission power to make orders giving effect to agreed terms settled by parties to a dispute. That section does not require the Commission to make a finding as to jurisdiction. It is simply giving effect to the wishes of the parties. 20 When then questioned by the Bench as to the enforceability of such orders, (that is, orders made beyond jurisdiction), Mr Schmitke replied that the parties would have expressly given the Commission jurisdiction, by default, to enforce the terms of the agreement. When further asked by the Commission if, on the Federation's logic, the provisions in the Union's claim relating to consultation and notice were within power because they plainly would arise during the terms of the contract determination, Mr Schmitke agreed that technically these matters would be within jurisdiction. 21 In reply, Mr Hatcher said that the problem with Mr Schmitke's submission was that there may be a real difference between the termination of engagement and the termination of a contract. Many contracts will provide for enforceable terms after the termination of engagement; for example confidentiality or restrictive trade clauses. Mr Hatcher said that the fact an engagement had ended doesn't lead to a conclusion that the contractual obligations between two parties are thereby brought to an end. Consideration of the Jurisdictional Challenge 22 To the extent that there possibly could be any doubt as to the jurisdiction of the Commission in this matter, I firmly consider that the Full Bench decision in Monier Roofing Limited v Transport Workers' Union of Australia, New South Wales Branch (1992) 50 IR 335 amply dispels any such doubt. 23 The outcome in that case resulted in a contract determination being determined by the Commission which provided as follows: 4. Cartage Arrangements It shall be a term and condition of any Contract of Carriage between the Contractor and a Carrier that the Carrier; (i) will not refuse to perform the Contract of Carriage; or (ii) will not subsequently refuse to enter into a Contract of Carriage , (my emphasis) on the ground that the Contractor has permitted, or proposed to permit, any other person or company to be supplied with any quantity of Product from the premises of the Contractor at which the Carrier normally obtains Product to be delivered to another of the Contractor's premises, or on the ground that the Contractor has permitted, or proposes to permit, any customer of the Contractor, or any person or company on the customer's behalf, to be supplied with any quantity of Product from such premises. 24 In considering the Union's challenge to the jurisdiction of the Commission to make a contract determination which, by its terms, required a party to enter future contracts of carriage, the Full Bench said: We should add that Mr Hatcher submits that, insofar as the application seeks a determination requiring carriers to enter into future contracts of carriage, it is beyond the jurisdictional grant of s91L of the IA Act. We do not agree with that submission, the jurisdiction as to contracts of carriage imparted by the section being that of inquiring 'into any matter arising with respect to any condition, under a contract of that class'. Our view is that the imposition of a condition upon existing contract carriers that they not refuse, on specified conditions, future contracts of carriage is permitted by s 91L as 'a condition under a contract of that class'. This finding extends to the jurisdiction emanating from s 680(1) of the Industrial Relations Act. 25 The unassailable conclusion from this passage is that a contract determination can undoubtedly provide for obligations on parties beyond the end of the existing contract determination. On one view of the Full Bench's conclusions, it is extraordinary that one contract determination can impose such an unlimited obligation on a party to enter into a subsequent contract determination. However, on any view, this conclusion gives a very wide scope to the meaning of the words in s 313(1) of the Act. 26 That being said, and while the challenge mounted by the Federation can be comfortably disposed of by reference to the above authority, I propose to make some further observations on the arguments put by the respective parties. 27 It is illuminating to note that no other employer organisation or individual employers supported the submissions of the Federation challenging the Commission's jurisdiction to make a contract determination in the terms sought by the Union; although, as will become obvious, all employer parties strongly resisted the Union's claim on discretionary grounds. 28 In my view, the submission of the Federation flies in the face of the findings of the Beattie Report (Inquiry into s 88E of the Industrial Arbitration Act 1940 ('the 1940 Act'), Beattie P, Sheehy and Sheldon JJ, 23 February 1970) which led to the original establishment of the jurisdiction over 30 years ago to regulate carriers under the 1940 Act. At paras 30.82 of the Report the Full Bench of the Industrial Commission in Court Session said: The jurisdiction should be confined to questions or disputes arising from the re-organization of a principal contractor's business which affect, or are likely to affect, the number of owner-drivers used or to be used by him or their remuneration. Consultation well in advance of the proposed change would enable the tribunal to be approached in a proper case without the disagreement flaring into direct action. I shall return to the Beattie Report later in this decision. 29 There has been no action by the legislature since that time to oust or restrict the jurisdiction in the manner contended for by the Federation and in my opinion, the construction placed on s 313(1) of the Act by the Federation is plainly erroneous. The modern approach to statutory construction requires, inter alia, the words of the section to be read in their context, including in the context of the section in which they appear and the Act as a whole. See: Attorney General's Department of NSW v Lupcho Dafkovski [2007] NSWIRComm 94 relying on Fox v GIO Australia Limited (2002) 56 NSWLR 512. 30 The Federation's submission seemingly ignores the express power of the Commission to make a contract determination in respect to the remuneration of the carrier and any conditions under the contract. The effect is to neuter the power of the Commission to make contract determinations expressly provided for in the section. By so doing, the Federation's submission defeats the very purpose of the provision itself. On this basis alone it cannot be accepted. 31 To my mind, the words 'with respect to' have particular relevance and significance. The Federation's submission makes no reference at all to these words and, by inference, gives them no work to do. The Federation concentrates exclusively and, ultimately in a limiting way, on the words 'arising under'. In my view however, the emphasis must be on the words 'with respect to'. 32 The expression 'with respect to' has been consistently held by courts and tribunals to have a wide scope. In Solomons v District Court of NSW, McHugh J said at para 45: But to adopt that argument is to take an unnecessarily restrictive view of the phrase "with respect to … the trial" in s 68(2) of the Judiciary Act. That phrase has a very wide meaning. In the constitutional context, Latham CJ once said that "[n]o form of words has been suggested which would give a wider power". 38 This court has also given a wide meaning to the not dissimilar phrase "in respect of", saying that it only requires "some discernible and rational link" between the matters in question. 39 In its natural and ordinary meaning, jurisdiction "with respect to … the trial" is wide enough to embrace applications made after an acquittal. 33 In my view, there can be no doubt that there is 'a discernable and rational link' between a contract determination dealing with redundancy pay and the remuneration of the carrier and any other condition under the contract, as expressed in s 313(1) of the Act. Even if it was not strictly remuneration, it most certainly is a condition under the contract. 34 Notwithstanding this finding, the Federation's submission seems to me to be misconceived on a number of other bases. Firstly, an obligation to pay redundancy pay does not in fact arise when the contract has been terminated. The obligation arises during the term of engagement, or at the very least, in so far as redundancy pay is concerned, simultaneously when the engagement is terminated. This proposition is well demonstrated by the sliding scale of redundancy pay according to years of service and the age of the carrier which can only arise directly as a result of accumulated service during the terms of the engagement. Similarly, and more obviously, the obligation on the principal contractor to give notice and consult with the carrier and his / her Union when a definite decision has been made to terminate a contract arises during the terms of the contract. Mr Schmitke seemed to concede as much when he acknowledged that the obligations on a principal contractor to consult and give notice of termination arises prior to the termination of the contract and thus, on the Federation's own logic, were matters within the Commission's power. I would add, what a curious result it would be if an industrial instrument could contain notice and consultation provisions in the event of redundancy, but not provide for redundancy payments. 35 Secondly, there can be no doubt that certain rights and obligations of parties to a contract determination arise, and are enforceable, after the termination of the contract of engagement; for example, the return of property, such as uniforms, radio equipment and the like, confidentiality provisions or restrictions on a carrier working for a competitor. Mr Hatcher correctly observed that there is a clear distinction between the termination of engagement and the termination of the contract because, in the latter, ongoing obligations on the parties may continue according to the terms of the contract itself. 36 Thirdly, an unfortunate corollary of Mr Schmitke's contention being upheld would be to invalidate redundancy provisions (and presumably other matters which arise after the termination of the engagement) in existing contract determinations or contract agreements approved, or made by the Commission under Ch 6 of the Act. When questioned about this, Mr Schmitke said that contract agreements (but presumably not contract determinations) reflect agreements between parties which the Commission merely endorses or, in other words, 'rubber stamps'. I note that redundancy provisions are also found in contract determinations which may, or may not, have been the subject of arbitration by the Commission. Nevertheless, this submission ignores the approval process for agreements required by s 325(1) of the Act, and implies that the Commission is able to approve an agreement between parties which is beyond power. 37 I do not see how it is open to the Commission to approve or make an industrial instrument, either by consent or otherwise, if the terms of that instrument are plainly beyond power. One consequence would be whether a party could seek to legally enforce a benefit under an industrial instrument which was beyond the power of the Commission to make in the first place. Accordingly, I am unable to accept Mr Schmitke's view that parties to an agreement can simply vest jurisdiction in the Commission by default, where jurisdiction otherwise doesn't exist. It is an inescapable proposition that jurisdiction of the Commission arises from the terms of the statute and not from the wishes of the parties. 38 Fourthly, it seems plain enough that when viewed in terms of the rationale for the creation of Ch 6 of the Act, and its predecessor provisions, a contract of engagement between a contract carrier and principal contractor is very much akin to a contract of employment between an employee and employer (see later considerations of the Beattie Report). When seen in this way, could it seriously be suggested, given the long history of redundancy benefits being awarded by the Commission to employees, that such payments are invalid because the obligation to pay redundancy pay arises after the contract of employment has ended? The answer is self evident. 39 Fifthly, I do not consider that Mr Schmitke's reliance on Deltec and Greyhound assist his arguments as to the Commission's lack of jurisdiction in this matter. Both cases dealt with the powers of the Commission to reinstate a contract of carriage after it had been terminated. In Greyhound it was held that there was then no head of power under the 1940 Act and in Deltec the Full Bench relied on s 680(3) of the 1991 Act. I note in particular that in Deltec the Full Bench expressly rejected the reliance on the then equivalent provision to s 313(1) of the current Act (s 680(1)) as being relevant to the issue of reinstatement of a contract of carriage. Plainly, the application here is concerned with the making of a new contract determination, a matter, I should say with respect, which is tangibly different to reinstatement. It follows that I consider Greyhound and Deltec are not to point. 40 For the aforementioned reasons, I conclude that the Federation's challenge to the Commission's jurisdiction to determine this application must fail and I determine accordingly. THE EVIDENCE 41 I turn now to the evidence adduced in these proceedings. For the Union 42 Mr Mark Crosdale is the Union's Newcastle and Northern Sub Branch Secretary. He has been a union official since 1998 and previously worked as a truck driver for four to five years prior to completing a Communications Degree at the University of Newcastle. As a truck driver, Mr Crosdale performed a combination of local and long distance work and drove tip trucks, specialised semi-trailer tanker vehicles and semi-trailer general freight trucks. 43 Mr Crosdale described how he had regular contact with carriers, including occasions where the work they are performing is no longer available and their engagements are terminated by the principal contractor. Mr Crosdale also referred to the practice of the payment of 'goodwill' in the industry. Mr Crosdale said that because owner drivers often have to provide specialised equipment for their vehicle or display company livery, these requirements add to the difficulties of finding alternative work when their contracts are terminated. 44 Mr Crosdale said that the reasons commonly relied upon by a principal contractor for terminating the engagements of carriers were similar to other employers who make employees redundant - a downturn of work, loss of contracts, introduction of new systems of work, new technology or the contracting out of transport functions. 45 Mr Crosdale deposed that, at times, there has been conflict and sometimes disputation when a carrier's contract is terminated. He gave a number of examples and said that if there were minimum redundancy entitlements, disputation would be minimised. Mr Crosdale said that despite there being no general contract determination which provided any redundancy provisions or payments to carriers, a number of existing contract determinations contain various provisions which are applicable in the event a carrier's engagement is terminated: 1. Boral Resources (NSW) Pty Ltd Sydney Metropolitan Concrete Contract Determination [354 IG 301]; 2. Transport Industry - Car Carriers (NSW) Contract Determination [321 IG 264]; 3. Transport Industry - General Carriers (Smith Family) Contract Determination ; 4. Transport Industry - General Carriers Contract Determination [335 IG 1384]; and 5. Transport Industry - Quarried Materials Contract Determination [271 IG 78]. 46 Mr Crosdale provided a schedule of the details of some 34 negotiated agreements with the Union which include redundancy or termination provisions. He said that many of these agreements were negotiated in the 1980's and 1990's when the industry was less stable and where the industry was dominated by large companies such as Mayne Nickless Ltd, Brambles and TNT. 47 Today however, Mr Crosdale said that there has been significant changes in the major companies with new entrants and mergers and acquisitions; for example, Ansett Air Freight, McPhee and Riteway are now part of TNT and Grace Couriers, Ipec and Finnemore are now part of the Toll Group. Patrick had emerged as a major transport company which is in the process of being taken over by Toll. Mr Crosdale said that the Union has been unable to negotiate redundancy arrangements for it's carrier members engaged by the new transport giants of Linfox, Toll, Patrick, Westgate, Star Track Express and 1st Fleet. As a result, the number of carriers covered by redundancy arrangements has significantly reduced. He identified a further 76 contract agreements which contain termination provisions without compensation. 48 Mr Crosdale said that it was common for negotiations to occur after notice of termination is given, including negotiations over engagement with a new company or elsewhere within the principal contractor's business. 49 Mr Crosdale identified four unregistered arrangements which contain termination provisions: a. The 'Head Contracts' between each Contract Carriers and Boral Resources (NSW) Pty Ltd who perform work transporting ready-mixed concrete contain provisions which specify procedures and compensation in the event that a contract carrier's engagement is terminated. b. TNT has a number of policies in place which set out the procedure and compensation payable in the event that a contract carrier's engagement is terminated for reason of redundancy. c. Monier Roofing paid redundant contract carriers when their plant was closed down 2.5 weeks for every year of service (see Monier Roofing Pty Ltd v Quintell (sic) and Another [78 IR 38]). d. Monier PGH Holdings when it introduced new lifting equipment and reduced the number of carriers and paid the redundant carriers 2.5 weeks for every year of service based on the carriers' standing costs (see Profilio v Monier PGH Holdings Ltd (1996) [86 IR 189] and Monier PGH (Holdings) Ltd v Horsey (1998) [86 IR 63]). 50 Mr Crosdale gave three examples of disputes where carrier drivers had been made redundant and paid no compensation: Rumsey v R Clifford and Son Holdings Pty Ltd (1996) 68 IR 75; Beck v Incitec Ltd t/as Chemtrans (1996) 86 IR 38 and Transort Workers' Union of Australia, New South Wales Branch v TNT Australia Pty Ltd, IRC2030 of 2005. (The latter matter had settled.) 51 In cross examination, Mr Crosdale was questioned as to the practice in the industry of the payment of 'goodwill' and the wording in the Transport Industry (General Carriers) Contract Determination [235 IG 1611] ('General Carriers Contract Determination') which states 'No circumstances exist where a vehicle is sold with work'. Mr Crosdale said that to the best of his recollection he had not advised any of his members as to the words in this clause. He also said that the Union had a general principle of 'last on first off'. 52 Mr Crosdale was asked about his belief that if a general minimum standard of redundancy entitlements was granted, it would reduce disputation in the industry. He agreed that this would not prevent the Union from approaching individual contractors in order to achieve higher minimum conditions. He disagreed the minimum would become the 'stepping off point' and denied that disputation would, in fact, increase. 53 Mr Crosdale agreed that the Transport Industry - Quarried Materials Carriers Contract Determination [271 IG 78] provides for a three month notice period in the event of a termination of a contract due to a downturn in demand. However, he said that this provision did not cover all of the claims in the Union's application. 54 Mr Crosdale agreed that a fixed term contract had an expiry date which is a notification of termination. However, many fixed term contracts are simply rolled over and there is an expectation by the carrier of ongoing work. He said a contract carrier can never be sure a fixed term contract will end at the contract's expiry date. Mr Crosdale said that it was not unreasonable for a carrier on a fixed term to expect redundancy at the end of the fixed term, because in many cases the contract is renegotiated or rolled over on a continuous basis. 55 Mr Crosdale agreed that in some circumstances in the logistics industry, drivers with one principal contractor are moved over to another contractor in the event of a loss of the contract. An example was where Symbion terminated its carriers and, all but two of them, moved to the new contractor, Toll. 56 Mr Crosdale acknowledged that the intent of the Union's application was that where an existing contract determination makes provision for some level of redundancy or severance payments, these payments can be offset against payments which might be awarded through this application. 57 Mr Crosdale was asked about the calculations of fixed costs and running costs in the General Carriers Contract Determination. Mr Crosdale confirmed that in agreements with the RTA, wages under the general contract determination are identified as a standing / fixed cost. Mr Crosdale said that he had never been asked for advice from a driver concerning 'goodwill' prior to the 'goodwill' payment actually being made. 58 Mr David Etchells is currently employed as an organiser with the Union having been formally employed as an owner / driver for a division of TNT Pty Ltd, TNT Express (formerly Comet). 59 Mr Etchells referred to a number of agreements between the Union and TNT relating to the conditions to be applied in the event of the redundancy of carriers engaged by TNT. 60 A 1992 agreement provided three weeks payment for each year of service, at labour and fixed costs only, to a maximum of 52 weeks or $50,000 whichever is the lesser. Should the cap be reached, carriers with 17 years continuous service or more receive an additional $500 for each completed year. The agreement provided for 'last on first off' and voluntary retrenchment. 61 Mr Etchells said that in 1992 and 1996 a number of carriers had accepted voluntary redundancy from the Company on the basis of the 1992 agreement and further in May 2001, 20 carriers whose engagements were terminated by TNT were paid according to the 1992 agreement. 62 It was Mr Etchell's belief that where a contract carrier's engagement had been terminated by TNT for reasons of redundancy that TNT had always made a severance payment at least as beneficial as that set out in the 1992 agreement. 63 Mr Etchells agreed in cross-examination that the 1992 agreement provided that the arrangements were not to be used as a precedent for any future negotiations between TNT and the Union. Mr Etchells was unaware of other instances where TNT hadn't applied the 1992 agreement or had applied some other arrangement and that TNT had various redundancy arrangements in place. Mr Etchells only knew of the policy as it had applied to the division he had been working at. 64 Mr Joe Cruickshank is an owner driver (Cruickshank Transport) who commenced working as an offsider for Stegbar Pty Ltd in 2003. In September 2003 he paid Mr David Wheeler (who had worked at the yard for 25 years) $150,000 for the truck and 'goodwill' and commenced performing work for Stegbar. He believed the truck was worth $100,000 when he commenced work. Mr Cruickshank said there were six trucks driven by carriers. 65 In 2005, negotiations for a new contract reduced the rates paid to carriers. In November 2005, Mr Cruickshank said he received notice terminating his engagement from 16 February 2006. The Company claimed a downturn in business forced it to reduce its carriers from six to four on a 'last on first off' basis. On 25 January 2006, Mr Cruickshank had been accused of damaging windows and he did not perform any more work for the Company. He received a final payment on 27 January 2006, but no compensation for the termination of his contract. 66 At Stegbar, Mr Cruickshank received about $15,500 a month for an average 40 hours a week. It took Mr Cruickshank about three months to find alternative work with Premium Packaging. He used the same truck, but was required to put on a new body which cost $10,000. He currently receives $11,150 a month from Premium for an average 52.5 hours a week, 5:00am to 5:00pm, Monday to Friday. He has a second job at Woolworths packing shelves and also works weekends as a fruit packer at the fruit markets. 67 Mr Cruickshank said his termination with Stegbar has significantly affected his home and family life. He has three children and his wife works two days a week at a childcare centre. She was expecting another baby in November. He and his family have had to cut back in their expenses and on gifts and outings for the children. He said that his family had not been able to meet their normal living expenses and while his wife had intended to have 12 months off after the child's birth, she now planned on returning to work after 12 weeks. 68 In cross-examination, Mr Cruickshank further described the circumstances in which he bought into the Stegbar yard. He agreed he had sought advice from his accountant and solicitor at the time. He believed there to be a good history at the yard. However, Mr Cruickshank said he had not known there was a 'last on first off' policy. 69 Mr Cruickshank said that from 2000 to 2003 he had driven his own truck for Baida Chickens. He hadn't paid to get into the run. He had sold the truck later, but with no 'goodwill'. The working hours were not suitable for his young family and he intended to look around for other avenues. There was no termination payments because he had left voluntarily. 70 Mr Cruickshank said that when he was engaged by Stegbar he had received no documentation for three months. He was guaranteed work because of the specialised fit-out of his truck. He had also worked for another company during his time with Stegbar. Mr Cruickshank said that he had received advice from the Union and was now pursuing a claim of compensation seeking 'goodwill' from Stegbar. 71 Mr Cruickshank agreed his contract with Stegbar provided for three months notice of termination. However, when he had talked about it with the Company he had been told that drivers had only been put off for gross misconduct and the Company had never put any drivers off in the past. Mr Cruickshank said that while he had sought legal advice at the time, he had not sought to include termination payments in the contract. 72 Mr Cruickshank could not recall details of the financial returns of his company from 2003 - 2004 or 2004 - 2005. He had been required to have an offsider on his truck because of safety issues with handling windows. The offsider was paid $40,000 a year. 73 Mr Craig Manny is a director of C & K Manny Pty Ltd. He gave evidence that in mid 2001 he had purchased a truck and run at Key Plastics Pty Ltd from a Mr Paul Eshman. On 25 August 2001 he had paid a deposit of $3,000 and commenced training with Mr Eshman. On 21 October, he had paid a further $47,000 and took over the lease of the truck which, at that time, owed $74,180.10. He said the truck was worth about $65,000. When he commenced his engagement with Key Plastics there were 12 trucks operating from the yard of which four were carriers. The remainder were operated by a fleet owner using employee drivers. 74 Mr Manny said that when he had commenced work he was earning around $150,000 per year. In November 2003, he was advised that 1st Fleet were taking over and he would be required to invoice them instead of Key Plastics. Rates were increased for long trips, reduced for shorter trips, and an allowance of $120 for delivering to building sites was removed. Around 27 February 2004, Mr Manny was advised that his contract was reverting to Key Plastics with the rates remaining as they were with 1st Fleet. 75 On 22 November 2005, Mr Manny attended a meeting with Key Plastics and was informed that the Company had decided to outsource its transport requirements and had opted for Alvaro Transport. Mr Manny had asked if the rates would remain the same and whether he would receive priority for loading. He was told that there was no priority, but rates would remain the same. On 1 December the Union notified a dispute to the Industrial Commission and on 23 December Mr Manny received a letter terminating his engagement from 17 March 2006. 76 Mr Manny has worked some casual work for S&L Road Haulage and Tollfast but his earnings were significantly reduced, while his expenses had not. For the three months April - June 2006 he earned $43,940, $29,738 less than in the same period in 2005. Mr Manny has two teenage children and his wife works five days a week for $650 nett including, 3 days of 12 hours a day. 77 In cross-examination, Mr Manny said that when he had first purchased the truck he had reviewed Mr Eshman's earnings and spoken to a solicitor about the contract. He was told it was worth buying. At the time he had received no documentation or contract from Key Plastics. 78 Mr Manny agreed that he had been offered work with Alvaro on the same rates, but had chosen not to accept the offer because he was not able to sell his truck with work. He has since made a claim for 'goodwill' against Key Plastics. 79 Mr Phillip Powney purchased a 1 tonne van and run for $45,000 from a Mr Peter Henley. The van was in poor condition and only worth about $2,000. Mr Powney then commenced work as an owner driver for Faulding Healthcare Pty Ltd, later the Mayne Group, then Symbion. 80 Prior to the termination of his engagement in 2006, there were about 42 contract carriers working out of the Rydalmere depot. Mr Powney was earning around $1,700 a week for 10.5 hours a day, Monday to Friday, with monthly expenses of vehicle lease $60, fuel $600, insurance $125, registration $60 and public liability of $17. His new truck was a 2001 Mercedes Commercial worth $10,000 of which he still owes $9,000 on the lease. 81 In early January 2006, Mr Powney attended a meeting with management and the Union at which they were told the Company was putting its transport work to tender. The drivers were invited to submit a tender which was to include new technology such as PDA's and GPS tracking systems. Mr Powney said he left the meeting feeling shocked having worked for the Company for 16 years without any dissatisfaction ever being expressed by management. Mr Powney and the TWU Drivers Committee obtained quotes to become incorporated and for the new technology. New technology would cost $200,000 upfront and a further $60 a week. In March 2006, the drivers provided a quote which was 17% above what was currently being paid. The Company told the drivers the quote was too high and to go away and re-do the costs. They were not told of the price they would need to beat. Further meetings were held where 'goodwill' was also raised and rejected by Symbion. 82 In early June 2006 the drivers had submitted a new quote which resulted in a considerable reduction in earnings. They were informed the rate was too high and that they would need to supply the new technology. Mr Powney now believed Symbion had no intention of continuing their contract and on 22 June the drivers were informed that Toll would be taking over the work. 83 In meetings with Toll, Mr Powney and other drivers were told that they would not be earning the same as they had with Symbion, 'goodwill' would not be recognised and they would be required to perform adhoc courier work in addition to the Symbion work. 84 Mr Powney finished work for Symbion on 31 July 2006, because of the conditions required by Toll, and now works at a pharmacy warehouse for about $1,000 per week. Mr Powney and other drivers have sought compensation from Symbion which has been refused. As a result of his losing work at Symbion, Mr Powney and his wife decided to sell an investment property and a vehicle and his wife was considering moving from part time work to full time in administration. 85 In cross-examination, Mr Powney said that when he commenced work for Faulding in 1990 he was told the contract was for three years, but would be renewed or rolled over every three years. He had sought advice from an accountant at the time. 86 Mr Powney said that when Mayne Group had taken over the work, the contract was for a fixed period till April 2006. When Toll took over, Mr Powney would have earned around $1,400 gross a week with the same truck and work, and adhoc work would be extra. He agreed that 95% of the drivers moved over to Toll. Mr Powney said that a claim for 'goodwill' had been made by the Union against Symbion on behalf of a number of drivers. 87 Mr Powney agreed that from around 2004 - 2005 he had operated his cartage business through a company known as P&S Gray Pty Ltd. He was shown the financial accounts for the Company for the year ending June 2003 which revealed income from Mayne and Symbion of $262,357 with expenditure for subcontracting of $131,308. The arrangement was that he had employed two others who had worked in the warehouse as drivers. A Mr Karan worked 90% as a driver with his own vehicle and a Mr Sandamingo worked 90% in the warehouse and he also had his own vehicle. Mr Powney could not be sure if he received subcontractor fees from the amount of $131,308. The accounts also disclosed a nett profit of $56,733 for the year and a truck value of $28,320 with depreciation of $6,370. 88 The 2004 financial statement disclosed sales of $287,578, payments to subcontractors of $151,454 (the two subcontractors earlier mentioned) and $81,600 for wages, nett profit of $23,848, truck value $21,948 with depreciation of $4,938. Around this time, Mr Powney said he would have spent 50% of his time driving and 50% in the warehouse. He used three to four drivers for his truck. The warehouse work had commenced in 2000 and he was put off his warehouse duties in 2004. Mr Powney agreed that he had structured his business to maximise the financial benefits. For the Respondents 89 Mr Anthony Paul Clarkson is the Regional Logistics Manager for Hanson Construction Materials Pty Ltd. Mr Clarkson gave affidavit evidence concerning the Company's quarry and concrete operations. Mr Clarkson said that in the quarries the rates for casual carriers are governed by the Transport Industry Quarried Materials Contract Determination [271 IG 78]. He said that quarried materials provide a more constant workload and the market is less dictated by customer demand and weather than the concrete industry. The Company currently engages 10 permanent carrier quarry tipper trucks under a carrier's agreement. Under the agreement, first preference is given when carriers are required on any given day and if there is no work, the carriers' are free to seek engagement elsewhere. The carriers' trucks are not badged or printed with Hanson insignia. The termination value of the contract for a Sydney Metropolitan quarry carrier is $6,000. 90 Mr Clarkson said that the number of carriers has fluctuated over the past decade. Prior to 1994 (when Hanson was known as Pioneer) 40 contractors were engaged - some since 1950. In 1994 this was reduced to 16 with the 24 carriers who left bought out at $30,000 each. In 1995 a new contract was finalised for five years. In 2001, the 1995 agreement was replaced with the existing agreement. Four carriers had left when the last contract had expired and two others have since left voluntarily. Mr Clarkson said the average income of the permanent carriers is $149,690. 91 In country areas (except Bathurst) Mr Clarkson said that the quarry transport is undertaken by carriers or fleet operators engaged on a casual basis. At Bathurst there are eight company owned tippers. 92 Mr Clarkson deposed that the Company has a quarry fleet of 103 trucks with a casual fleet of 1000 carriers. The number comprised both carriers and around 250 contractors which engage 10-15 carriers each. These are utilised on a needs basis. Mr Clarkson said that about 80% of the quarried work is undertaken by the Company fleet operators, 10% by casual carriers and 10% by the permanent carrier fleet. 93 Casuals and fleet operators are used on a needs basis depending on peaks in the market and may perform work for other companies on the same day. The relevant contract determination only has a classification for rigid vehicles. Where a casual carrier uses truck and trailer combinations a going rate of 75% of the contract determination is paid. 94 Mr Clarkson deposed that the Company engages a fleet of 166 carrier concrete trucks - 88 in the Sydney Metropolitan area and 78 in country / regional NSW. While the carrier owns the vehicle, it is badged with Hanson insignia, and Hanson own the barrel. As a result, all carriers are 'tied' subcontractors with no ability to work for another company. 95 Mr Clarkson said that the market is very fluid and the Company services demand by changing the Company fleet. It has long and entrenched relationships with the carriers and would not consider reducing their number while demand could be met by fluctuating the Company fleet. It was also more costly to terminate a carrier than retrench a company driver. Eighty company trucks operate in country areas where there is less volume and jobs tend to be smaller. Mr Clarkson said the number of carriers in the metropolitan area has remained fairly stable and no change has ever occurred due to retrenchment. 96 Mr Clarkson said that the carriers are engaged under the Hanson Construction Materials Pty Limited Contract Carriers Contract Determination [354 IG 272] which will be renegotiated in 2014. Clause 3.2 provides arrangements for termination. If the Company wishes to terminate a carrier for reasons other than serious misconduct, $66,000 is paid to the carrier and the Company must offer to buy the vehicle at market value. In the previous 10 year agreement the fee was $80,000 in the first three years, reduced to zero by year 10. The current figure was agreed for the life of the contract determination, based on a safetynet payment at the time the contract was negotiated in 2004. The safetynet was said to be 12 months wages based on truck and insurance costs, labour ($51,136), depreciation, administration, incorporation, establishment fee, expenses and interest / profit. 97 Mr Clarkson said the Company had closed a plant in Moree in 2006 which involved terminating two carriers with five year contracts. Although Mr Clarkson estimated their annual earnings at $60,000, they were actually paid $66,000 and the Company bought their truck. Mr Clarkson estimated the earnings of country carriers in the past 12 months at $114,610 and metropolitan carriers at $134,700. 98 Mr Clarkson identified the significant differences in payments made to truck driver employees made redundant in accordance with the Transport Industry (State) Redundancy Award and those that would be received by carriers if the Union's application was successful. The calculation was based on $134,700, less a running costs component. For example, an employee with six years service or more would receive $9,371.20, and a carrier $30,861 based on 16 weeks, and for over 45 years of age - 20 weeks, the figures are $11,714 and $38,576 respectively. 99 In cross-examination, Mr Clarkson explained that his Company pays a market rate for articulated vehicles notwithstanding the contract determination is not confined to rigid vehicles. Mr Clarkson agreed that the Union's application was limited to carriers whose engagement involves regular and systematic engagement for at least six months and that the Company's permanent carriers would be covered by the claim. Mr Clarkson further agreed that although the five year quarried materials agreement for carriers details a contract value of $30,000, it reduces by $6,000 over the life of the agreement to zero. However, the agreement was extended by one year and, although it is reduced to zero, it was the Company's intention that if any engagement was terminated, the $6,000 would be paid. Nevertheless, negotiations for a new agreement in the quarried materials area were pending and would include discussions of a termination or severance payment. 100 As to the concrete side of the business, Mr Clarkson confirmed that market fluctuations are dealt with through the employees driving company trucks, not the carriers. Mr Clarkson added that there was an incentive to use the carriers because a cheaper rate is paid for higher volume work. 101 Mr Clarkson acknowledged that with the current agreement applying to 2014, including a $66,000 termination payment, the Union's claim would have no effect because the payments would be offset to the extent of any minimum payments ordered as a result of the claim being successful. 102 Mr Tony Khoury is the Executive Director of the New South Wales Waste Contractors and Recyclers' Association. Mr Khoury described the type of vehicles used in the industry as: + Front Lift: A front Lift is used where commercial and industrial customers have amounts of waste or recyclables for collection. Studies have proven that this is generally the most economical way to collect and dispose of waste and recyclables as the driver rarely has to leave the cab of his truck to effect a pick up. + Rear Lift: A Rear Lift is used where commercial and industrial customers have amounts of waste for collection. However the driver always has to leave the cab of the truck to effect pick up of waste. + Hook lift / Dino: This is used for the collection of bulk bins and compactors from commercial and industrial sites. + Hiab: This is the traditional truck that delivers front and rear lift bins to commercial and industrial clients. + Liquid waste: These vehicles generally collect either septic waste, grease trap waste or industrial liquid waste. 103 Mr Khoury deposed that for many years operators in the industry have used carriers because of cost controls in circumstances where carriers are typically paid piece rates, ie per bin, cubic metre, kilogram, tonne, litre, or pick up. Carriers also require less supervision to achieve optimal collection outcomes and having a mixed fleet guarantees a greater continuity of service. 104 Mr Khoury said that there was very little regulation of carriers in the waste industry although the Transport Industry Waste Collection and Recycling Contract Determination [335 IG 1384] applied to carriers in the domestic waste collection sector. Mr Khoury was only aware of one company, Site Environmental Solutions, which engages carriers in domestic waste collection for Ashfield and Wagga Wagga Councils. He said that the vast bulk of carriers (95%) are engaged in the trade or industrial waste sector, where no contract determination applies. Industrial carriers negotiate individual arrangements based on market forces, although there are several examples of collective contract agreements. Although largely unregulated, Mr Khoury was not aware of any instance in the waste industry where a carrier had been terminated for reasons of redundancy. 105 In cross-examination, Mr Khoury agreed that the waste industry contract determination makes no provision for any payment to the contract carrier in the event the contract is terminated due to lack of work or redundancy. Further, the calculation of the rates under the determination contain no factor relating to redundancy or severance pay. 106 Mr Khoury conceded that, in respect to the industry overall, the commercial exposure to the Union's claim is fairly minimal, if not non-existent. Mr Khoury was not aware if the General Carriers Contract Determination would apply in the trade waste sector. 107 Mr Chistopher Wulf has been the General Manager of Metromix Pty Ltd for three years. The Company has eight concrete plants and two quarries in metropolitan Sydney with a plant in Katoomba. These involve 41 maxi carrier concrete trucks, 11 mini carrier concrete trucks, 5 company owned maxi trucks, 3 company owned mini trucks and 35 company drivers. Metromix has operated for 21 years and Mr Wulf said that over this period the carrier fleet has remained very stable. Even during periods of downturn, the carriers are kept on and permitted to undertake other forms of engagement. To the best of his knowledge no carrier has been terminated for reasons of redundancy. Transfers between plant are also used to service demand. The Company has always used carriers as the primary source of concrete transport with the Company fleet used to manage fluctuating demands of the market. Where there has been a reduction in the Company, concrete fleet drivers are transferred to the aggregate fleet where sufficient turnover has allowed alternate work to be available. When reducing the Company fleet the Company has generally sold the trucks to the carriers in the fleet. Metromix owns the barrel or agitator on the carrier's vehicle which is required to be Company branded. 108 Mr Wulf said that since 1994 the Company has negotiated a collective agreement to cover the carrier's engagements. The first ran from 1994 to 2004 and the current agreement - Transport Industry - Metromix Concrete Haulage Contract Determination [348 IG 1025] expires in 2015. Mr Wulf said the agreement is very lengthy and complex. The calculation of rates, utilisation levels and safety nets are very complicated. The total labour cost per annum of the carrier is $44,884. Included at Clause 3.3 are termination arrangements which provide 12 weeks notice and a payment to the carrier of $52,000 for mini trucks and $71,000 for maxi trucks. This calculation is based on labour, lease payments, selling costs and wind up costs. The labour provision represents approximately 20 weeks of labour costs contained in the formula in the contract. 109 Mr Wulf said the average tenure of the Company's carriers is 15 years with a number of them in excess of 20 years. Average earnings of the drivers of the six metre capacity truck over the past year was $122,000 and seven metre capacity was $136,000, and the mini fleet was $95,000. 110 Mr Wulf calculated the difference in payments to employee drivers and carriers if the application was granted. The calculation is based on carrier income of $125,000 less running costs (25.56%). It shows a six year service employee would receive $9,371 compared to a six year service carrier who would receive $28,630. 111 In cross-examination, Mr Wulf agreed that the Union's amended application made direct reference to Metromix and to the extent that offsetting would apply, the claim would have no impact on the Company. 112 Mr Anthony Gratland is the Operations Manager for Rinker Australia Pty Ltd t/a Readymix. He is responsible for the Company's concrete operations in metropolitan Sydney. This involves 23 concrete plants, 22 company owned concrete trucks and 136 carrier concrete trucks (113 in the Sydney Region and the balance in Wollongong and Newcastle). The Company has used carriers as its primary source of concrete transport since 1969 and the Company fleet has never exceeded 36% of the total fleet. To accommodate peaks and troughs in the market, the Company owned fleet has fluctuated from a high of 77 in July 2004 to its present low of 22. 113 The Company carrier drivers have the following service: Years of Service Drivers 30 plus 1 20-30 10 10-20 26 0-10 76 Total 113 114 Mr Gratland said that in April and June 2006 the Company made 24 company drivers redundant and paid them redundancy in accordance with the State Award, plus an additional three weeks severance pay. Other trucks were sent interstate for use in its operations elsewhere. 115 In the Sydney Metropolitan area the carriers have earned between $100,000 and $125,000 in the last 12 months. This is much lower than usual due to an industry downturn. The Company owns the barrel of the vehicle and the truck is painted with Readymix livery meaning the carriers are 'tied' subcontractors. 116 Mr Gratland said that the Company currently has a second 10 year agreement with the carriers which was negotiated with the Union. It is a lengthy and comprehensive collective agreement effective from 2005 to 2015 (Transport Industry - Readymix Holdings Sydney Concrete Carriers Cartage Contract Determination 348 IG 1028). The cartage rates under the determination are on the basis of paid metres of concrete carted over a quarter at the average fleet utilisation rate with a safetynet to ensure carrier earnings do not fall below a certain level. The formula is very complicated and takes into account productivity, labour, ownership, overhead costs, running costs and profit. The labour cost includes wages, allowances, casual labour, overtime, superannuation, long service leave, leave loading and workers' compensation. Mr Gratland deposed that the true labour cost per annum of each carrier is $51,136. Five carriers are engaged in the country fleet with incomes of around $115,000 to $125,000 per annum. 117 Mr Gratland said that in Cl 33 of the determination there are arrangements in respect to termination (other than for serious misconduct). These provide for 12 weeks notice and the following sliding scale of payments calculated with reference to profit or return on capital: Year 1 2 3 4 5 6 7 8 9 10 of termination Amount payable $60K $60K $50K $40K $30K $25K $20K $20K $15K $10K Carriers may also assign the contract at any time subject to certain conditions. 118 Mr Gratland undertook an exercise to calculate the redundancy payments to an employee under the Award in comparison to the Union's claim for carriers. At the six year or more level of service, the figures are $9,371.20 and $28,356.80 respectively, and for over 45 years of age the figures are $11,714 and $35,446 respectively (this does not include the additional three weeks pay, (see para 114 above). 119 Mr Gratland said to the best of his knowledge the Company has never reduced its carrier fleet because of economic factors, although over the last 12 years two carriers were terminated for insolvency. Mr Gratland said that, at no time, had the carriers' representatives raised the need for a redundancy scale and the 10 year determination was intended to provide security and certainty for both the carriers and the Company. In cross-examination Mr Gratland acknowledged that he had not been personally involved in these negotiations. 120 Mr Gratland agreed that generally it was more expensive to terminate the engagement of a carrier than an employee. He agreed that under the Union's claim there would be no 'double dipping' or double counting in terms of what would be paid to a carrier in the event of a contract being terminated due to redundancy. In the result, Mr Gratland conceded, that the impact of the claim on his Company would be minimal, if non-existent. 121 Mr Nigel Ward is the General Manager - Human Resources and Employment Relations for Boral Ltd. In this role he is responsible for Boral Australia's Construction Materials Division (ACM Division). 122 The ACM Division comprises the Boral quarry, concrete, asphalt, transport and land development businesses. It is Boral's largest division generating $2 billion in annual revenue and with 4,000 employees Australia wide supplemented by 1,650 contractors. In New South Wales, the figures are 1,830 and 586 respectively. Mr Ward said that the Boral transport business has a diversified transport fleet. 123 Mr Ward deposed that a number of Boral's businesses use carriers for the transportation of materials, goods and products who are engaged under contract determinations of the Industrial Relations Commission of New South Wales. 124 Boral drivers may be engaged as employee drivers, hauliers or carriers - the difference between a haulier and a carrier is that the haulier owns their prime mover, with other equipment owned by Boral, whereas the carrier owns both the prime mover and all the other equipment. 125 Mr Ward described each of the sectors of Boral's business. Quarried Materials / Asphalt Fleet 126 In this fleet there are 45 carriers, (37 permanent and eight casual) who generally work 40 to 45 hours a week for an average of $138,520 per annum (1 July 2005 - 30 June 2006). The carriers' terms and conditions are regulated by the: (a) Transport Industry Quarried Materials Carriers Contract Determination ; (b) a letter of appointment (except for casuals); and (c) a negotiated rise and fall formula which adjusts the cartage rates applicable to the cartage of asphalt. 127 Mr Ward deposed that the vehicles used in the Quarried Materials / Asphalt carrier fleet can be utilised as general purpose tippers for a wide variety of cartage work outside of Boral Transport. It is not a requirement to paint the vehicles in Boral colours. Nevertheless, a number of carriers have been with Boral for a very long time. Mr Ward was not aware of any carrier being terminated in recent years due to insufficient work. Since the 2000 Olympics, 16 permanent carriers had left the fleet of their own accord. There is no formal termination arrangement for carriers in this fleet due to the fact that the carriers can utilise their vehicle for other cartage work outside of Boral. Quarried Materials Fleet 128 This fleet, which currently utilises 61 employee drivers and 39 hauliers undertakes road cartage of quarried materials such as sand, gravel and road base materials, primarily from Boral owned quarries or concrete plants. 129 The hauliers primarily purchase large prime movers which are required to be painted in Boral colours. The purchase price varies considerably due to the type of vehicle, make, age, kilometres travelled and the condition of the vehicle. 130 Employee drivers average 52 hours a week with average remuneration of $63,957, and hauliers 45 - 50 hours for an average $198,489 per annum. The terms and conditions for hauliers are regulated by various agreements with cartage rates negotiated from time to time. Many of the hauliers were previously employee drivers who purchased their prime mover from Boral. Where a haulier wants to get out of the business they can take the prime mover with them or sell it to the Company or, in limited cases, sell the prime mover to a new incoming haulier who must be approved by Boral after a rigorous approval process. 'Goodwill' is not permitted in the purchase. 131 Mr Ward deposed that in the last decade no haulier in this fleet has been terminated due to a downturn in work. Bitumen Fleet 132 There are two employee drivers and four hauliers involved in road cartage of hot bitumen. The hauliers purchase the prime mover and cart bitumen in tankers owned by Boral. The purchase price of the prime mover is variable, but higher than in the rest of the fleet due to the requirement to be fire rated. Average hours for employee drivers is 50 hours per week for an average $85,000 per annum and for hauliers 45-50 hours for an average of $298,650 per annum. The terms and conditions of hauliers are regulated by an agreement with different cartage rates for single and double tankers. Hauliers were first engaged seven years ago and most were previously employee drivers who purchased their prime mover from Boral. Mr Ward said no haulier has since left the fleet. Powder Tanker Fleet 133 This fleet of 55 employee drivers and 32 hauliers undertakes road cartage of powdered lime and powdered cement in specially designed pressurised tankers. All vehicles are painted in Boral colours. The employee drivers work an average of 52 hours a week for an average of $74,910 and the Hauliers work an average of 54 hours a week for an average of $284,650 per annum. Two agreements apply to the hauliers depending on when and how they started with Boral. Where hauliers wish to get out of the business the same arrangements apply as referred to in para 130. 134 Mr Ward said that in the last seven years no haulier has been terminated due to a downturn in work. Brick / Masonry Fleet 135 This fleet consists of 24 permanent hauliers and six permanent carriers all of whom are engaged for a fixed period. The hauliers either own the prime mover with flat top tray body and dog trailer owned by Boral or own the prime mover with no body and a drop deck trailer owned by Boral. The carriers own all the equipment. They purchase either a forklift or crane to lift product. Given these factors the vehicle combination is relatively specialised and varies considerably in price. 136 During the relevant period, hauliers and carriers worked an average of 10 hours a day during the week and occasionally work a half day on Saturday for $179,695 per annum and $152,780 per annum respectively. Terms and conditions for hauliers are regulated by an agreement and two sets of cartage rates depending on the vehicle configuration. 137 Mr Ward deposed that the Brick / Masonry fleet arose from a major change program in Boral's brick, masonry and roof tiles business when the former employee driver fleet became a haulier / carrier fleet. Dispute proceedings were heard in the Commission involving redundancy for employee drivers and the terms on which haulier positions were offered to employee drivers. 138 Mr Ward deposed that where a haulier wished to get out of the business they either take the prime mover with them or sell it to Boral. Mr Ward said no haulier had been terminated in the last seven years due to a downturn in work. 139 The terms and conditions for carriers are regulated by either an assignable agreement for carriers engaged prior to June 2000 or a non-assignable agreement for carriers engaged after June 2000. Mr Ward said these agreements applied Boral's general principal on 'goodwill' and where it did not exist agreements were expressly non-assignable and where it did exist, a contractual regime was applied to eventually extinguish the practice. Two sets of cartage rates apply depending on vehicle configuration. Where a carrier wishes to get out of the business they may sell the prime mover to a new incoming carrier approved by Boral. Mr Ward said in the last seven years no carrier has been terminated due to a downturn in work. Core New South Wales Business 140 Boral's core New South Wales business involves the manufacture and transport of premixed concrete from concrete batching yards in metropolitan Sydney. Engaged in this fleet are 136 employee drivers and 44 carriers. The carriers have either a six or eight wheeler prime mover to which an agitator is fitted. Boral owns 32 of the agitators. Both the employee drivers and carriers work an average of 50 hours per week for an average of $58,067 per annum and $127,744 per annum respectively, or $69,384 after taking account of average costs associated with the cartage for carriers. The terms and conditions of the carriers are regulated by the Boral Resources (NSW) Pty Limited Sydney Metropolitan Concrete Contract Determination [354 IG 301] and for a three year fixed term head contract for 29 carriers and seven year fixed term head contract for 15 carriers. 141 Mr Ward deposed that the current carrier arrangements have a complex history dating back to the early 1990's when the practice of the carriers was selling their 'truck with work', for premiums of $250,000. The depressed market conditions meant that many carriers in the concrete industry faced bankruptcy and the industry underwent intense structural and industrial turmoil in order to effect more competative and sustainable cartage arrangements. There was much disputation and litigation involving fleet numbers, cartage rates, allocation of work and 'goodwill' which was ultimately settled in 1994 with a number of carriers exiting the fleet with termination payments and a new form of contract being put in place for carriers retained in the business. 142 The 1995 contract was for a 10 year fixed term with a sliding scale of terminating payments if a contract was terminated. As part of the exit process Boral would also purchase the carrier's prime mover as almost all the remaining carriers had to purchase new prime movers with greater capacity. 143 Prior to the expiry of the 1995 agreement, negotiations for a new agreement broke down and Boral proposed moving to an employee driver fleet. Carriers had a choice of becoming employees or being 'paid out' the residual contract value at the expiration of the 10 year 1995 contract. There were lengthy proceedings in the Commission and ultimately 49 carriers remained with Boral, the remainder being paid out. One of the terms, was that termination payments in the new head contracts were to be offset by this application. Mr Ward said this had not yet been confirmed by the Union. 144 Mr Ward said that concrete carriers are all but employees in many ways. For example they: (a) operate in and around our company vehicles; (b) have their vehicles painted in our colours; (c) their prime mover is fitted with our mixer which unlike a tipper or tanker trailer is an integral and permanent part of the unit; (d) wear our uniforms and are more than simply unloading the product but also maintain a customer service element to the discharge process; and (e) often are required to purchase specific aged or capacity assets (assets that are not very versatile for other functions). 145 Mr Ward said most of Boral's concrete cartage arrangements provide some form of termination payment for what might be described as redundancy. 'Goodwill' is to be eventually phased out. 146 Mr Ward said the Boral cartage rates are novel as they apply a monthly retainer and are based on an extensive model which accounts for all legitimate fixed and variable costs. Boral Country Concrete Business 147 The Boral country fleet transports premixed concrete from concrete batching yards to customers in country New South Wales. There are 151 employee drivers and 31 carriers using similar vehicles to the metropolitan fleet, although the agitators are owned by Boral. All drivers work an average of 46 hours per week with employee drivers earning an average of $50,598 per annum and carriers $104,296 per annum or $66,296 taking account of costs. 148 Mr Ward said that from around 1999 the Boral carrier country fleet put Boral at a fundamental cost disadvantage and the Company sought to address the problem. There were numerous dispute proceedings and negotiations lasted over a year with the fleet moving to a largely employee driven fleet. 149 While the number of carriers remained, they entered a new four year fixed contract with the purpose of eventually removing any 'goodwill'. A new contract was negotiated in 2005 which included an employee styled redundancy payment which was intended to offset any outcome in this application. The carriers in the country fleet are now regulated by the Boral Country - Concrete and Quarries Contract Determination [357 IG 241] and a fixed seven year head contract with particularly modelled cartage rates. 150 Mr Ward said that Boral's fleet is very diverse having regard to each fleet's history. In more recent times, Boral had sought to analyse its cartage rates in order to ensure the rates are properly accounted for. Where 'goodwill' has been an issue Boral had tried to find a consensually acceptable solution to control, diminish and extinguish it. 151 Mr Ward deposed that a number of factors have made employee driven fleets more attractive in recent years. For example: (a) the historically low cost of capital; (b) improved equipment and business management systems; and (c) the diminished ability to fully contract out to carriers such things as OH&S and environmental accountability. 152 Mr Ward expected that contracts and arrangements entered into with the Union should be honoured and not 'invaded' by applications such as that being pursued here. Boral's more recent concrete arrangements have been negotiated in light of the Union's current application and should be excluded by undertakings given by the Union that Boral's concrete business is not subject to the application. 153 In cross-examination, Mr Ward did not accept that the amendments made to the Union's application satisfactorily addressed the issue of offsetting as far as the metropolitan concrete determination was concerned. Mr Ward said the complicated arrangements under the determination include a vehicle payout arrangement and a company dissolution payment which are not contemplated by the offsetting proposed by the Union. He agreed the difficulty arose as to what constitutes a definition of termination payment. 154 Mr Ward explained that the Company dissolution payment, which is indexed, comprehended costs associated with winding up the Company such as dealing with Australian Securities & Investments Commission, final accounts and the like. Mr Ward said that one way of dealing with an asset which is not paid off in a redundancy situation was to look particularly at the three months notice period. Mr Ward said that if the application didn't apply to Boral's arrangements still in effect, there would be no problem. The situation with the Boral country arrangements is similar, but the trucks are written down assets. 155 Mr Ward said that the Union's claim appeared to be calculated against gross earnings, whereas under the Boral arrangement, payment is the labour payment for the dislocation of the labour. Nevertheless, Mr Ward insisted that the Union had given an oral undertaking during the recent country Boral negotiations that this application would not apply. While Mr Ward had sent a letter requesting confirmation of the undertaking, no reply had been received. The same payment in the country also refers to labour dislocation, not gross income. In the result the claim, would exceed the country scale. 156 Mr Ward gave a qualified 'yes' to the question that assuming no offset for the payment of the truck, the Union's claim would have no practical effect on Boral Country. Mr Ward added that Boral had no plans to make redundant any existing carriers in the country and Boral does not make accruals for potential redundancies. 157 Mr Bob Mackenzie, the National Industrial Relations Manager of TNT Express has responsibilities which include employee and contract carrier management, discipline, terminations and associated employment matters and the negotiation of industrial instruments. 158 The Company provides delivery services worldwide and has operated for over 60 years. In Australia, the Company picks up and delivers 710,000 consignments per week, involving 5,000 employees and approximately 690 carriers. The Company has approximately 450 carriers in New South Wales engaged predominantly in road express, priority and same day businesses. Each area has significantly different engagement and termination arrangements involving a number of contract determinations, enterprise agreements and purely commercial contracts. Some industrial instruments deal with 'goodwill', sale of vehicle and termination payments. 159 Mr Mackenzie deposed that there are no consistent or standard prescribed minimum payments for termination as a result of a downturn in freight volumes. Mr Mackenzie said that although TNT had agreed to payments for termination, redundancy or 'goodwill', there is no arrangement which provides for a combination of all three and no arrangement where termination payments are made at the end of a fixed term contract. Mr Mackenzie further deposed that while TNT had entered into a variety of arrangements for the payment of redundancy pay, it was done for commercial reasons and is not intended to be used as a precedent. There is no one standard and each arrangement is on a 'case by case' basis. 160 Mr Mackenzie responded to Mr Etchell's statement by saying that TNT had agreed to the Union's claim for termination payments for carriers at the TNT Enfield depot in 2001 as a result of the need to quickly reduce the number of drivers at the depot and to avoid industrial unrest. It was not intended to be used as a precedent and was made in substitution for all other payments that may have been made under 'goodwill' arrangements. Mr Mackenzie said that the 1992 agreement was a policy document used by TNT at its discretion. It did not, and does not, have any precedent value. 161 Mr Mackenzie said that TNT opposed the Union's claim seeking standard redundancy provisions which would apply in all circumstances where commercial circumstances didn't warrant it. This is particularly the case where TNT pays an amount of 'goodwill' on a commercial basis. The claim would impose additional costs without the ability to offset other agreed payments. He said carrier arrangements are of a different character to employment relationships and any increase in costs would make some arrangements commercially unviable. 162 Mr Mackenzie attached eight TNT specific agreements or contract determinations and said the Company is also bound to the General Carriers Contract Determination and the Transport Industry Courier and Taxi Truck Contract Determination. 163 In cross-examination, Mr Mackenzie agreed that the TNT retrenchment policy developed in 1992 still exists and is referred to in some agreements and determinations. However, the quantum in the policy has not been used in the previous six years. Where carriers have been made redundant they have received either more or less than is in the policy. The outcome has arisen after negotiations with the Union. 164 Mr Mackenzie said that carriers on fixed term contracts are predominantly in the long haul area. Some of these drivers have worked for TNT for a very long time. There was no prescribed redundancy payments for these drivers, but the Company would need to make a commercial decision in the event someone with long service was made redundant. He agreed it was more likely, based on equity and fairness, that a payment would be made in these circumstances. 165 As to the 1992 agreement, Mr Mackenzie acknowledged that it had arisen after negotiations with the Union and followed industrial action. It was a policy, not a registered agreement. Mr Mackenzie said that out of 450 drivers in New South Wales around 250-280 would be covered by TNT's policy which provides for greater payments than the Union's claim (three weeks per year of service, calculated at labour and fixed costs, to a cap of 52 weeks or $50,000). The remainder are in the same day courier business which has no redundancy provisions at all. There are owner drivers in this business who have worked for the Company for many years. It is a fluctuating business and downturn in work may not lead to any action to put off drivers. They may go and work elsewhere in a downturn. In the event of a requirement to put drivers off, a commercial decision would be made, based on a variety of factors, as to the payment of redundancy. Mr Mackenzie could not point to any methodology that might be used in these circumstances. 166 It was Mr Mackenzie's understanding that the Union's claim would still require 'goodwill' to be paid together with redundancy pay under the Union's claim. TNT would begin to make accruals for future redundancies, as the claim would apply to fixed term contracts (around 50 to 80). He qualified this by saying that accruals would only be made if the Company knew a contract was not going to be renewed. However, the long haul contracts are regularly renewed. 167 Mr Mackenzie explained that the circumstances which applied at the Enfield Depot required the Company to quickly reduce the fleet by 40 to minimise financial losses. It was a fairly generous offer taken up by the drivers within a week. No 'goodwill' was paid in addition. 168 Mr Geoffrey Tinney was formerly the General Manager of Industrial Relations for TNT Australia and Executive Director of the NSW Road Transport Association (1995-2001). 169 Mr Tinney said that he had been involved in many negotiations with the Union regarding employees and carriers. During his time with TNT he was involved in negotiations for redundancy payments for carriers arising from industrial pressure from the Union. Mr Tinney said it was agreed that the payment of redundancy would not necessarily be made on each occasion a contract was terminated. It was to be agreed on a 'case by case' basis with the calculation of any payment only having regard for the labour component of the remuneration. At the time Mr Tinney said not all the divisions of TNT utilised carriers. 170 During his time at the RTA, Mr Tinney deposed that in the numerous discussions and negotiations he had been involved with, no claim had ever been made for redundancy pay for contractors. In cross-examination, Mr Tinney conceded that he meant there had been no industry wide claim, but there had been company by company claims. 171 Mr Tinney said he had a wide experience and knowledge of the operation of businesses in the road transport sector which he estimated had 20-25% carriers. He had been involved in the following industry sectors: + local cartage / general carriers + wharf cartage / container work + car carrying + couriers + taxi trucks + waste collection and recycling + refrigeration + furniture removal and storage + interstate / line haul + bulk tanker haulage (power and liquid tankers) In these sectors carriers are utilised, but are not all covered by contract determinations. He said the nature of contract carrying was variable, from long term, to short term and intermittent. 172 Mr Tinney said the reasons why a carrier may be utilised include: + To cater for sudden fluctuations of work load. Most businesses experience rises and falls in the amount of work they have, and to cater for this, some businesses have a core component of employee drivers and utilise contract carriers to fill in for extra work. + To allow for a greater flexibility of service. There are occasions where companies will not have enough trucks or drivers to supply a service which may be required for 24 hours per day. Contract carriers are able to be utilised here, as they provide not only the labour component but also the vehicle. + To allow for incentive payments. Many principals are paid by the ton or by the pallet by their clients. Contract carriers are able to be engaged on this basis. This allows principals to quote for the work more effectively and accurately. The use of the contract carrier allows for the principal to have certainty about their costs. + To reduce the need for the principal to purchase equipment. The cost of the vehicle is not borne by the principal. This allows them to grow the business and manage cash flow by using contract carriers, who supply the vehicle and the labour. + To reduce lead times for supply of equipment. The difficulty of acquiring vehicles, which require the long build time, is not an impediment to obtaining work. + Lack of space at transport depots means difficulty in garaging vehicles. The fact that the contract carrier garages and maintains the vehicle provides a reduction of costs for principals in operating their business. 173 Mr Tinney deposed that carriers are remunerated to cover their costs and expenses in purchasing and running their vehicle. The standing rate reflects the cost the carrier incurs for purchasing and maintaining the vehicle and having it ready for engagement. The running rate is to cover costs associated with the actual operation of the vehicle including the labour component. The calculation also allows for a return on capital. In some sections of the industry carriers can work for many different principals. Some are covered by contract determinations, while others are not. Some agreements provide for redundancy arrangements, but these vary according to the commercial needs of the company and there is no industry standard. 174 Mr Tinney believed that the Union's claim would increase costs, reduce competitiveness and impact adversely on cash flow and margins. There would be a disincentive to use carriers. 175 Mr Tinney identified the following factors as to why drivers choose to be carriers: * control of their own business; * taxation concessions in running their own business; * ability to control their own finances within a company structure. This enables them to claim deductions for expenses which as employees they would not be able to claim; and * choose the kind of work they want to do and whenever they want to do it. 176 Mr Tinney believed that generally most carriers find little difficulty in finding alternative work when a contract ends. There may be some difficulties for drivers with specialised equipment. Mr Tinney acknowledged that a premium ('goodwill') is sometimes paid in addition to the value of the truck. 177 In cross-examination, Mr Tinney was able to confirm that the redundancy arrangements he referred to involving TNT was the 1992 agreement (see the evidence of Mr Etchell) which was negotiated in the context of a recession and which resulted in a significant number of employee and carriers of TNT being made redundant. Mr Tinney had no knowledge of whether TNT had paid redundancy to carriers prior to the 1990's. The intent of the 1992 agreement was to come to some arrangement that would negate industrial problems, when redundancies were required. 178 Mr Tinney agreed that in some divisions of TNT, carriers were the predominant or core fleet of drivers. 179 In further cross-examination, Mr Tinney agreed that in the General Carriers Contract Determination labour costs are identified as standard (fixed) costs, and not running costs. 180 Mr Tinney denied that redundancy costs only arise when a redundancy occurs as any good operator would accrue for its possibility. He said that the TNT division he had worked in, accrued for redundancy. He denied that it was not commercial practice to accrue for redundancy. He accepted that in accounting terms the accrual would not be considered as an expense unless it was actually paid and he conceded that no sensible commercial operator would put aside money, if it was not recognised as an expense for tax deduction purposes. 181 Mr Tinney was queried about the list of benefits which he claimed applied to carriers, in particular that they can choose what kind of work they do and when they do it. Mr Tinney agreed that for permanent carriers this wouldn't apply, as they would be directed by the principal contractor as to what work to do and when. 182 Mr Tinney acknowledged that when he said that it was not too difficult to obtain alternative work when a contract ended, depended on the prevailing economic circumstances and while it may be true now, it mightn't be in the future. 183 As to 'goodwill', Mr Tinney accepted that in a redundancy situation a carrier might lose both his work and the 'goodwill' and in the absence of some redundancy arrangement must accept the loss or take the risk of legal action. The risk may be greater than another driver without 'goodwill'. 184 In a reply affidavit, Mr Crosdale disputed Mr Tinney's claim that redundancy arrangements with TNT were agreed to only on a 'case by case' basis. Mr Crosdale identified nine TNT agreements which provide for redundancy payments including both labour and fixed costs, not just labour costs as claimed by Mr Tinney. 185 Mr Crosdale rejected Mr Tinney's assertion that granting the Union's claim would make the use of contract carriers less attractive. He said many operators have stable owner driver fleets where changes in demand are effected firstly in the employee driver fleet. 186 Mr Crosdale said the work of carriers covered by the Union's claim is largely controlled by the principal contractors who direct and control the volume, quality and time of when work is to be performed. 187 Mr Crosdale denied that carriers find it easy to find alternative work and often suffer a period of non-engagement and when they do find alternative work it is often on inferior terms and conditions. 188 Mr Crosdale said that when a carrier has paid 'goodwill' and has had their engagement terminated there is no capacity to recover the amount, except through litigation. 189 Mr Terry Dene was the Commercial Director of the NSW Road Transport Association for 12 years until August 2002. Mr Dene provided affidavit evidence and oral testimony. However, as Ms Paul appearing for Australian Industry Group did not rely on Mr Dene's evidence, I do not refer to it. 190 Mr Paul Ryan was formerly the Industrial Relations Manager for Mayne Nickless ('Mayne') (1987 - 1994) and is presently the National Industrial Relations Adviser for the Australian Road Transport Industrial Organisation (ARTIO). Mr Ryan said his role is to advise and represent the ARTIO in all major industrial relations matters. 191 Mr Ryan said that during his time with Mayne, the Company had a redundancy policy applying to carriers. This was generally reflected in carriers' agreements negotiated collectively at yard level with the Union. These arrangements were dictated by commercial operations and varied between yards, with some yards having no arrangements in place. 192 Mr Ryan deposed that from his direct knowledge, carriers are engaged in two ways - as permanent hire when the carrier has been engaged for long term contracts and casual hire where the carrier is hired on a needs basis. Principal contractors tend to utilise a mixture of permanent and casual hire. Mr Ryan said that carriers with heavy equipment usually have 50% of their income related to the provision of the capital of the equipment. Remuneration takes account of capital, depreciation, interest, return on investment, running costs and labour. 193 Mr Ryan believed that carriers made up 20% - 30% of the industry and were used as a helpful tool in providing flexibility to a business. A company can better plan its labour management to the level of work it receives and reduces the need for companies to carry capital costs in the form of trucks and equipment. Nevertheless, carriers' work is cyclical. Mr Ryan said that carriers are financially better off than employees as they can take their trucks with them when a contract is terminated. Given the current labour shortages, carriers can readily find work elsewhere if their contract is terminated. 194 Mr Ryan believed that the cost of the Union's claim would make the use of carriers less attractive as it would impose higher costs and higher levels of accruals in what is a competitive industry with low margins. Mr Ryan was unaware of any other regulatory regime in Australia which require redundancy payments to be paid to subcontractors. 195 In his reply statement, Mr Crosdale denied that carriers are used to supplement a fleet. Carriers are usually the core of the fleet. He rejected Mr Ryan's claim that it was easier to find a carrier than an employee. The preference for carriers is influenced by many factors. Mr Crosdale said it was not usual accounting practice for companies to make accruals for redundancy. He referred to the annual reports of Boral, Toll, Patrick Corporation and Rinker which make no such provision. 196 In cross-examination, Mr Ryan said that the redundancy policy which was applied by Mayne was a standard three weeks per year of service with components for labour costs and fixed costs. It was a policy that may or may not have applied at particular business locations. Mr Ryan said that Mayne is no longer involved in transport, but he was unsure if the former redundancy arrangements carried over to the new operators which had purchased various parts of the business. 197 Mr Ryan conceded that some companies used carriers as the core of the fleet and some, although the minority, use carriers almost exclusively, such as the courier businesses. Mr Ryan agreed that some companies engage carriers with guaranteed work, hours and income. Mr Ryan agreed that in the 1970's and 1980's there was a pattern of switching employees to carriers. In the last decade the practice has been reversed. 198 Mr Ryan said the point he was making about carriers with heavy equipment was that the Australian Tax Office recognises that the capital brought to the equation is greater than the labour component. 199 Mr Ryan repeated his view that carriers are better off financially and said this was so because they operate a business, use the tax system to spread income and run other operations. He didn't consider the risks to be high as a carrier can take his truck and find alternative work. Mr Ryan agreed that this depended on the type of truck, the prevailing economic circumstances, the carrier's financial commitments and whether 'goodwill' was paid. 200 Mr Ryan agreed there was no accounting standard for an operator to accrue for redundancy, but he believed any prudent operator would put money aside for 'a rainy day'. However, he did not dispute Mr Crosdale's evidence of the annual reports of four major operators who don't make provision for redundancy. Mr Ryan agreed that there was no financial incentive for principal contractors to find redundant drivers alternative work if there was no requirement to pay redundancy pay. In re-examination, Mr Ryan said in some cases the carrier may revert to an employee or take up work with the new prime contractor. 201 Mr Paul Cotterill is the Human Resources Manager - Commercial Enterprise for the Smith Family. Mr Cotterill deposed that the Smith Family is a 'not for profit' enterprise which supports disadvantaged children. Its income is very diversified with only 7% coming from government grants and the remainder from donations, bequests and fundraising. 202 Mr Cotterill said that Commercial Enterprise has two main units - Nonwoven Textiles and Clothing Recycling. Mr Cotterill described the work of each of the units and said the Smith Family engages 20 carriers (16 in Sydney and four in regional areas) under the Transport Industry - General Carriers (The Smith Family) Contract Determination [286 IG 400]. 203 Each carrier is allocated a specific geographic area for the collection and delivery of clothing and other goods to the Villawood collection facility (which has 64 employees). Mr Cotterill said the viability of the recycling unit is marginal with the most recent result (2004 -2005) showing a loss of $1 million. However, the recycling of clothing and its resale is considered to be consistent with the broader goals of the Smith Family and provides a valuable community service. 204 Mr Cotterill said the Smith Family opposed the Union's application for the following reasons: 1. It would provide an additional cost that cannot be passed on to customers; 2. Increased costs may have to be absorbed which may further jeopardise the viability of the recycling operation; 3. Carriers are not required to have signage on their trucks which are available for a wide variety of uses in the event a carrier was required to obtain other work; and 4. The Smith Family has previously addressed the closure of a facility in Victoria by productive and open discussion with the carrier drivers in which a mutually agreed outcome was achieved. 205 In cross-examination, Mr Cotterill was shown the Smith Family's financial report for the year ending 30 June 2006. This showed an overall surplus of $1.54 million which was up from the previous year and nett revenue from Commercial Enterprise of $3.16 million - up from $2.05 million the previous year. It also showed the loss making wiper rag area of the business was transferred to external parties. 206 Mr Cotterill agreed that Government funding doubled in the 2006 year from 2005. Mr Cotterill acknowledged that the relevant contract determination provides for the right of the Smith Family to put signage on the carrier's vehicle. He said that he understood a driver was able to buy and sell his / her runs, but was unaware of how it was done. Mr Cotterill said there was no provision for any payments if a carrier's engagement was terminated. He agreed this would mean any investment in buying the run would be lost. The only provision was for one month's notice. 207 Mr Cotterill said he was not involved in negotiating the current Smith Family agreement but was aware of the circumstances which led to the making of the contract determination. A dispute had arisen in the mid 1990's over the carriers' right to sell their trucks with the runs. The practice was allowed to continue with the Smith Family being protected from any liability to pay 'goodwill'. 208 Mr Cotterill agreed that if an employee (as distinct to a carrier) was made redundant and paid redundancy pay this would also be an additional cost not able to be passed onto customers. Mr Cotterill also agreed that obtaining alternative work in the event of redundancy would depend on prevailing economic circumstances, whether alternative work was available and in what geographic location the driver worked. 209 Mr Cotterill confirmed that in the Victorian example he gave in his statement, the Smith Family was able to find six out of eight drivers alternative work. He agreed that the Union's claim provided for exemptions to redundancy pay if acceptable alternative work is found for redundant carriers. He understood this to be an option under the Union's claim. He agreed this provision would provide a financial incentive for an operator to find alternative work, rather than being required to pay redundancy pay. SUBMISSIONS For the Union 210 Mr Hatcher submitted that the Union's application was intended to provide for standard minimum redundancy entitlements for all carriers regulated under Ch 6 of the Act, provided that the carrier has been engaged regularly and / or systematically for a period of at least six months. While the application was closely modelled on the current standard redundancy award provisions applying to employees in New South Wales: See Re Application for Redundancy Awards, it had been modified to meet the particular circumstances applying to carriers. One example, was the different concept of a week's pay which, for carriers, includes both labour costs and the fixed costs associated with the costs of the truck. It was necessary to include fixed costs because fixed costs associated with maintaining the truck will continue, even if the truck driver is no longer engaged. 211 Mr Hatcher submitted that the application had been amended to take account of some of the employers' concerns (see the evidence of Mr Ward and Mr McKenzie) that 'double dipping' might result if certain termination payments made under identified industrial instruments were not able to be offset against any requirement to pay redundancy pay. These concerns were again addressed in a further amended application. 212 Mr Hatcher said that while all the respondents who appeared in the proceedings opposed the Union's application, their evidentiary cases were limited to specific companies who either had redundancy provisions far more beneficial than the claim, or whose concerns were adequately addressed by the amended application as in the case of Boral. He noted that the NSW RTA called no evidence at all and some of the largest employers in the industry such as Toll, Patrick, Westgate, Star Track Express and 1st Fleet offered no evidence. Mr Hatcher said that no evidence was called in opposition to those aspects of the application, other than the requirement to pay redundancy pay eg: requirement for notification and consultation. 213 Mr Hatcher put that the industrial regulation of carriers proceeds on three essential premises: 1. Carriers are a particularly vulnerable class of workers requiring special protection. 2. The dividing line between carriers and employee truck drivers is so insubstantial that there is no justification for them to be separately treated for industrial purposes. 3. Carriers are to be remunerated on the basis that they receive, as a minimum, the standard award benefits applying to employees and, in addition, recovery of the fixed and running costs associated with the operation of their trucks. 214 Mr Hatcher submitted that as new employee award standards have emerged they have gradually become incorporated into contract determinations. Superannuation was one such example: See Transport Industry - Courier and Taxi Truck (Superannuation) Contract Determination [315 IG 1]. 215 Mr Hatcher put that the Union's evidentiary case made out the following propositions: 1. The payment of redundancy benefits to carriers is not a novel thing, but has occurred pursuant to industrial instruments, agreements and policies over a number of decades. 2. The proportion of carriers covered by redundancy agreements and policies has dropped as the industry has restructured itself in the last decade. 3. It remains the case that carriers are terminated for redundancy-related reasons from time to time, often with inadequate notice, but are not paid any form of termination or severance pay, thus leaving them in difficult financial and personal circumstances. 216 There was ample evidence of current and past existence of redundancy pay arrangements which were usually more generous than what was sought in the application. Companies which have made such arrangements and have applied them, include TNT Australia Pty Ltd, Boral Resources (NSW) Pty Limited, Mayne Nickless, Brambles Limited, R Clifford and Son Holdings Pty Ltd, Incitec Limited (t/s Chemtrons), Bartter Enterprises Pty Ltd, CSR Ltd, Hardie Bathroom Products, Metromix Pty Ltd, Owens Transport Pty Ltd, Pioneer Concrete (NSW) Pty Ltd, Sita - BFI Waste Services Pty Ltd and Visy Board. 217 Mr Hatcher said however, that it was Mr Crosdale's uncontested evidence that recent commercial restructuring in the industry had led to a significant reduction in the proportion of carriers covered by redundancy arrangements. The Union had been unable to negotiate redundancy arrangements with the 'new transport giants' such as Toll, Linfox, Patrick, Westgate, Star Track Express and 1st Fleet. This evidence provided a proper basis for the intervention of the Commission because the industry was not satisfactorily dealing with the issue, with the result that the position of carriers is 'going backwards'. In this regard, Mr Hatcher highlighted the evidence of Messrs Cruickshank, Powney and Manny. These examples demonstrate the significant financial and personal detriment which can result from carriers being made redundant and demonstrates unfair and unconscionable conduct by principal contractors. 218 Mr Hatcher submitted that the case put against the Union's claim was in part philosophical in that it was contended that arrangements with carriers were purely commercial and should not be subject to regulation. Other of the employer witnesses suggested ongoing costs associated with the claim which was directly contrary to the usual accounting practice that redundancy benefits are not accrued and not recognised as a liability for tax purposes unless actually paid. 219 Mr Hatcher said there was some evidence about the effect of the application on fixed term contracts. However, this evidence merely disclosed that most fixed term contracts were renewed - often for many years. This demonstrated they were not true fixed term contracts, but a contractual device to avoid the requirement for notice or redundancy pay in the event they are not renewed. 220 Mr Hatcher said that other of the employer evidence turned on specific grievances which were devoid of substance or were properly addressed in the amended application. In this regard, he referred to the evidence of Messrs Wulf, Gratland, Clarkson, Ward and Khoury. As to Mr Cotterill's evidence on behalf of the Smith Family, he had conceded that the application would encourage principal contractors to find redundant carriers acceptable alternative work. His evidence of the financial effect on the Smith Family was exaggerated but, in any event, could be dealt with under the incapacity to pay provision in the claim. For Australian Business Industrial (ABI) 221 Mr J Donnelly opposed the making of a contract determination in the terms sought by the Union on a number of grounds. He submitted that the Union's claim was unique, novel and unprecedented in that it sought, for the first time, to establish, through an industrial instrument, a general entitlement to redundancy conditions for all carriers in New South Wales. For the Union to suggest that the claim was not novel and merely sought to equate carriers with employees, ignores the real legal, commercial and industrial differences between the two categories of worker. For the Union to establish its claim, there must be substantial and compelling evidence and the Union had not discharged the onus of proof in this regard. 222 Mr Donnelly put that the Union took a 'one size fits all' approach which failed to recognise the varying conditions which apply under different contract determinations and failed to pay proper regard to individually negotiated arrangements. He cited the evidence concerning the Smith Family and the contract determination which was negotiated with the Union and which would now be interfered with, if the claim was granted. Mr Donnelly added that the Commission should not impose obligations on parties where there is no demonstrated need for the obligation. He relied on the evidence of Mr Ward, Mr Khoury and that of the Union itself which demonstrated that carriers don't usually become redundant. 223 Mr Donnelly submitted that the evidence did not support the making of the contract determination. He said that Mr Crosdale's claims of a restructuring of the industry which had reduced the proportion of carriers covered by redundancy agreements does not support a general application for redundancy. Mr Crosdale had also ignored the fact that some contract determinations require 12 weeks notice of termination. Mr Donnelly said that the fact a particular company made arrangements for redundancy conditions for purely commercial reasons or to avoid industrial unrest, does not establish a safe basis for extending redundancy pay to all carriers in the industry. He added that Mr Cruickshank's and Mr Powney's circumstances did not disclose any basis for the award of redundancy pay. 224 Mr Donnelly, in relying on the evidence of Mr Ward, said that his uncontested evidence disclosed that: * the purchase price of vehicles for carriers varies considerably depending on make, age and the condition of the vehicle; * the terms of engagement of carriers differs in each fleet making a 'one size fits all approach' inappropriate; * except for the concrete business, there have been no carriers terminated in recent years due to a downturn in work; * Boral distinguished between casual and permanent carriers with fixed term contracts of short duration, not uncommon for the former; and * Boral's decision to extend redundancy conditions to a limited number of carriers in no way supports the application of redundancy conditions generally. 225 Mr Donnelly added that Mr Cotterill's evidence revealed that the Smith Family Contract Determination negotiated with the Union expressly excluded redundancy or severance payments and there was no justification to interrupt this agreed arrangement. 226 Mr Donnelly examined each of the Union's four primary grounds to justify its claim. Firstly, he referred to the Union's reliance on the Beattie Report to claim that contract carriers were a particularly vulnerable class of worker requiring special protection. He said that the fact that the Beattie Report found evidence of exploitation 37 years ago, does not support a claim of vulnerability now, when no contemporary evidence was brought to support such a proposition. In any event, Ch 6 of the Act was set up to rectify the exploitation identified in the Beattie Report and, to the extent that any exploitation existed, it had been addressed by the making of a significant number of contract determinations. Mr Donnelly relied on Mr Ward's evidence to demonstrate that the earnings of a carrier (after accounting for expenses) was significantly higher than those of an employee driver performing the same work (on average a difference of $15,698). He added that the ability to make a profit was a significant attraction for carriers. 227 As to the second ground relied on by the Union that there was no justification for treating carriers or employees differently, Mr Donnelly said that notwithstanding the words of the Beattie Report, the fact is that the Act treats them differently for industrial purposes: See Re Transport Industry (General Carriers) Contract Determination - Appeal by Transport Workers' Union, New South Wales Branch (1993) 46 IR 154 at par 162 - 163. Mr Donnelly said that the Union's approach ignored the very different legal and commercial relationships which exist between carriers and employees. 228 Mr Donnelly said that the third proposition advanced by the Union was that carriers should receive the same minimum entitlements as employee drivers. The Union relied on the Beattie Report to support this proposition, but ignored sections of the Report which recognised that carriers will not always be entitled to the same minimum conditions as employees. Moreover, in respect to redundancy, the Beattie Report advanced a 'case by case' approach. In addition, alternative remedies are available to deal with the termination of contracts under ss 106 and 346 of the Act. Mr Donnelly put that the fact that superannuation may have been incorporated into contract determinations was no basis to incorporate other award benefits in contract determinations. Mr Donnelly highlighted an array of conditions which carriers enjoy that do not apply to employees, such as greater financial flexibility, taxation benefits, a chance for profit and higher earnings. 229 Mr Donnelly rejected the Union's claim as to the existence of redundancy type arrangements supporting the imposition of general redundancy benefits. He said, on the contrary, these had arisen on a 'case by case' basis according to a particular commercial or industrial context, thereby illustrating the need to retain a 'case by case' approach. 230 Mr Donnelly relied on a decision of the Full Bench of the then Industrial Commission in Re Roads and Traffic Authority- Owner Drivers Employment Protection Award (1993) 50 IR 363 ('RTA Case') which had rejected an application by the Union to extend redundancy benefits to carriers, even though the carriers were 'deemed to be employees' under the 1940 Act. The Full Bench ultimately dismissed the claim on merit grounds, which included the following: (a) Firstly, the Full Bench acknowledged that the parties, had over the years, conducted their industrial relationships by way of on-the-job arrangements. In this regard the Full Bench stated the following at page 13 of the Decision: " Firstly, we would have a general reluctance in the absence of compelling reasons to the contrary, to make an award on one subject matter in respect of an industry whose whole history has been one of non-award coverage. That is the position in the present case. The parties have, over the years, taken the deliberate course of conducting their industrial relationships by way of industrial agreement and the on-the-job arrangements concerning tender forms, seniority lists, and the like ". (b) Secondly, the Full Bench noted that it was inappropriate for it to make an award for redundancy benefits in circumstances where contract carriers had expressly reserved their rights to bring claims against the Roads and Traffic Authority . In this regard the Full Bench stated the following at page 13 to 15 of the Decision: "Secondly, the making of such an award would not in any event determine the issue of payments to be made by the RTA to lorry owner drivers in cases of termination on account of redundancy. ... We would be reluctant to make an award determining redundancy pay claims of a group of person who, although in reality contractors, are by statute taken to be employees, when such persons have expressly reserved their rights to bring actions under Common Law or statute against the RTA arising from the same relationship between the parties and in respect of the same broad subject matter." 231 Mr Donnelly referred to the history of redundancy benefits under the Federal and State Acts and the purpose of redundancy pay being awarded. It was to represent compensation for the loss of non transferable credits such as sick leave and long service leave and to provide temporary assistance for redundant employees who may suffer hardship and inconvenience. Mr Donnelly said that these purposes do not apply to contract carriers as the cartage rate compensates for non-transferable credits, See: General Carriers Contract Determination. Unlike employees who may never be entitled to long service leave, a contract carrier receives compensation for long service leave throughout the contract. Contract carriers are business people assuming a risk. That is the fundamental difference to an employee. If this application was granted the risk would revert back to the principal contractor. 232 Mr Donnelly said that in many instances the cartage rates also include a component for profit and return on capital, thereby further reducing the owner drivers risk. He cited the following determinations: (a) the Hanson Construction Materials Pty Limited Concrete Carriers Determination ([354 IG 272] Schedule A - Rise and Fall); (b) Transport Industry - Metromix Concrete Haulage Contract Determination ([349 IG 1025] - Appendix 1); (c) Transport Industry - Readymix Holdings Pty Ltd Concrete Cartage Contract Determination ([351 IG 309] - Schedule 2); (d) Transport Industry - Waste Collection and Recycling Contract Determination (353 IG 1384] Clause 11. Remuneration). He claimed that if the Union's claim was successful it would amount to 'triple dipping'. 233 Mr Donnelly put that there would be a number of anomalies which would arise if the Union's application was granted. He said that notwithstanding the Union had amended the application in order to provide for limited exemptions, there may still be circumstances when a principal contractor would be required to pay redundancy pay in addition to payments arising from the termination of the engagement. Offsets would not be permitted for cartage rates which already include components for sick leave, long service leave and profit and return on capital. He said that the Union's definition of termination pay was too narrow. 234 Mr Donnelly said that the Transport Industry Redundancy Award provides exemptions for casual employees and employees engaged for a specific period of time. The present application provides neither exemption. He said that the Union offered no evidence of the distinction between casual and permanent carriers, whereas the respondent's evidence demonstrated casual drivers do exist in the industry. He said that if there was a dispute as to whether a rolled over contract was truly a fixed term contract, then it could be resolved in the Commission. 235 Mr Donnelly added that there was no evidence that carriers were more adversely affected than employees whose redundancy arose out of the ordinary and customary turnover of labour - another exemption under the Award, but not included in the application. 236 Finally, Mr Donnelly said that there were already a range of remedies available to carriers in the event of a termination of their contract and these existing remedies permit a continuation of the 'case by case' approach. For Australian Industry Group (AIG) 237 Ms V Paul traced the history of redundancy arrangements at the Federal and State level commencing with the 1984 Federal Termination, Change & Redundancy Case (1984) 8 IR 34 ('TCR Case'). This case determined that redundancy pay was justified as compensation for the loss of non-transferable credits and the inconvenience and hardship imposed on retrenched employees. She said that implicit in the rationale was that redundancy pay was an entitlement, irrespective of whether it leads to unemployment, but it was not payable in circumstances where the employee obtains acceptable alternative employment or in the transmission of a business. 238 Ms Paul said that this approach was applied by the Commission in Westfield Holdings v Adams (2001) 114 IR 241 where it was held that notice of termination was compensation for the period where an employee is searching for another job. This was consistent with the approach applied in the Federal TCR Case. Ms Paul put that the conclusion in Westfield demonstrated that the income maintenance approach was inconsistent with the purpose of redundancy pay. Ms Paul also highlighted the fact that casuals were exempt from redundancy provisions. She claimed their position was similar to carriers. 239 Ms Paul submitted that the Union's case demonstrated a lack of evidence to support the grant of the application. Mr Crosdale's evidence merely disclosed a wide variety of agreements, reflecting particular individual company circumstances. She said that the evidence of Messrs Cruickshank, Manny and Powney were complaints about the loss of 'goodwill', not evidence of the need for general redundancy provisions. Their losses were that of a lost business opportunity and one reason why their remuneration was higher than employees doing similar work. Ms Paul added that there were no new circumstances or reasons why the existing arrangements should be altered such as to create a determination on an industry wide basis. 240 Ms Paul further submitted that carriers are not employees and their engagements are governed by principles more akin to commercial relationships. Their work and remuneration are not the same as employees and in most cases, they prefer to be subcontractors than employees because of the added benefits they receive, such as tax concessions and added flexibility. 241 Ms Paul opposed the flow on of redundancy pay to carriers on fixed term contracts. The evidence was that fixed term contracts were common in the industry and carriers were aware of their agreed terms, irrespective of their expectations. Employees on fixed term contracts do not receive redundancy and it would be inequitable for principal contractors to bear the cost of redundancy in such circumstances, particularly when the carrier may continue on a new contract performing the same work for a new principal contractor. She said that while Mr Crosdale cited evidence of contract determinations which provided for early termination payments, none of these examples contemplated payments at the end of the fixed term. 242 Ms Paul submitted that the uncontested evidence of Messrs Tinney, Ryan and McKenzie was that the claim would increase costs for both the actual payment and the need to accrue for it. 243 Ms Paul said that the Union's application actually sought benefits in excess of those applying to employees. In particular, carriers would be able to 'double dip' in that they could receive redundancy pay and then take action under common law or for 'goodwill'. The claim does not exclude casual carriers or exemptions in circumstances where there is an ordinary and customary turnover of labour. 244 Ms Paul added that the respondents' evidence clearly demonstrated that the use of carriers varied depending on a range of factors. There were also varying arrangements for redundancy. This only demonstrated that a 'one size fits all' approach was flawed. Other difficulties with the amended claim was that it does not contemplate other payments which might be referable to the termination of the engagement. The amendments by the Union had been made adhoc and did not address the concerns of other businesses. 245 While opposing the application in its entirety, AIG proposed an alternative wording to Clause 9 in the following way by adding: Any termination payment agreements, that have been agreed between the principal and the contractor, such agreements having been entered into prior to notification of termination, shall be able to be offset against any entitlement under the contract determination. 246 Ms Paul equated the prohibition on flowing the terms of an enterprise agreement to an award under s 47 of the Act to the flow on of redundancy arrangements under specific contract determinations to a general contract determination. For Waste Contractors and Recyclers' Association of New South Wales (WCRA), Metromix Pty Ltd, Hanson Construction Materials Pty Ltd and Rinker Australia Pty Ltd 247 Mr R Warren of Counsel submitted that the evidence in respect to the trade waste industry, demonstrated that there was no need for the Commission to intervene and regulate for the payment of redundancy pay where the incidence of carriers being made redundant was unknown. 248 Mr Warren said that in respect to Metromix, a company specific contract determination applies until 2015 which includes 12 weeks notice and the payment of $52,000 for mini trucks and $71,000 for maxi trucks in the event of the termination of a carrier's engagement, for reasons other than misconduct. The evidence disclosed that no carrier has been terminated for reasons of redundancy. 249 Hanson Constructions also has a company specific contract determination which remains in force until 2014. Where a carrier is terminated for reasons other than misconduct, Hanson must offer to purchase the carrier's truck at market rates and make a payment of $66,000 to the carrier. This amount is fixed for the life of the determination. 250 Mr Warren referred to the evidence of Mr Gratland and said that when Rinker made a number of company employed drivers redundant in 2006 they were paid in accordance with the Transport Industry Redundancy (State) Award plus a further three weeks pay. Mr Gratland knew of no circumstances in which Rinker (or its predecessor, Readymix) had terminated a carrier for reasons of redundancy. Mr Warren also referred to the current contract determination which operates until 2015 and which requires 12 weeks notice and the payment of a sliding scale of redundancy payments commencing at $60,000 in the first two years, reducing to $10,000 in the tenth year. In oral submissions, Mr Warren referred to the specific reference in the contract determination to the compensation being adequate and said that the claim against Rinker represented a breach of that undertaking. He added that the sliding scale in this contract determination made it more likely Rinker would be affected by the application over time. 251 Mr Warren submitted that it could not be said that carriers in the waste contractors and recycling industry and the Readymix concrete industry were in a weak and vulnerable position. Their position was industrially strong and their interests were securely safeguarded. 252 Mr Warren said that the Union's witnesses had grievances in relation to the loss of 'goodwill' which had nothing to do with the principal contractor who, in the absence of any evidence, had made no false promises, was not aware of, and had not approved 'goodwill' payments. Moreover, in respect to Mr Cruickshank and Mr Manny, both were engaged under the General Carriers Contract Determination which expressly prohibited the practice of selling a vehicle with work. There was no evidence that principal contractors had acted unfairly or unconscionably to terminate any contracts of carriage. 253 Mr Warren said that the Commission should not impose unnecessary regulation on the four companies he represented in circumstances where no need had been demonstrated. However, if it was found by the Commission that a redundancy contract determination should be made, then the four companies should be exempt from the application. The companies already have existing long term determinations which provide for different outcomes in redundancy situations. 254 Mr Warren rejected the Union's claim that the companies would be protected by offsetting arrangements as the payments are calculated in multiples of weeks pay. In seven or eight years, the quantum of weeks pay may vary significantly. Mr Warren added that the parties to the Company determinations had successfully negotiated arrangements for the ensuing 10 years and the Commission should not impose potentially different outcomes in such circumstances. For the New South Wales Road Transport Association (RTA) 255 Mr M Dunne submitted that the Union's application sought to impose three main obligations on principal contractors: 1. A duty to notify; 2. A duty to discuss change; and 3. Severance pay. 256 Mr Dunne, while not conceding the applicant had established grounds for the making of the contract determination sought, did 'not dispute the applicability of the concepts of notification and discussion in circumstances where a contract is to be terminated'. When questioned in oral submissions about this admission, Mr Dunne said that the RTA neither opposed, nor supported, those aspects of the application. 257 Mr Dunne submitted that it was for the Union to establish the grounds for the application to be granted, notwithstanding that the RTA called no evidence in the proceedings. He said the RTA relied on the evidence of the other employer respondents and would have been merely duplicating evidence if it called evidence of its own. 258 Mr Dunne put that one of the Union's witnesses , Mr Powney, was not even a carrier as defined by s 309 of the Act. The evidence of the three Union witnesses, Messrs Cruickshank, Powney and Manny was about hardship arising from the loss of 'goodwill'. However, there was no evidence that the principal contractors made representations or inducements which led to the payment of 'goodwill'. 259 Mr Dunne sought to distinguish employees from carriers as to why redundancy pay should apply only to employees: (i) The entitlement to rely upon, and pursue an action, under, section 106 of the Act, as a remedy for hardship suffered, in appropriate circumstances. (ii) The ability to utilise the flexibility provided to business by the taxation system, and in particular the running expenses through the company. (iii) If goodwill has been paid, carriers have been able to "purchase a job" where an employee cannot. (iv) Evidence from the Union's witnesses indicates they received advice from professionals including accountants and solicitors before entering into a contract. (v) Carriers are not engaged solely on their basis as a driver but also upon their ability to provide equipment by way of a truck. Mr Crosdale conceded in cross examination that he was unaware of a situation where a contract carrier had been engaged without a truck and that when a contract carrier was engaged, the suitability of the truck was an important consideration. (vi) Contract determinations do not provide for sick leave, annual leave, parental leave or other forms of benefits for which an employee is entitled. Although provision is made in some contract determination formulas and are credited in advance, these uniquely employee benefits do not apply to carriers. The Union's application is to provide for severance pay on the basis of a redundancy which is also a uniquely employee based entitlement. (vii) The distinction between employee and sub-contractor is vital to the operation of Chapter 6. Chapter 6 exists only by virtue of an exemption from the Trade Practices Act and to dilute the distinction between contractors and employers may give cause for this exemption to be revisited. For the Australian Federation of Employers and Industries (AFEI) 260 Mr Schmitke submitted that the AFEI opposed the granting of the application on jurisdictional (paras 10-40) and discretionary grounds. He said the AFEI supported the submissions of the other employer respondents and in particular ABI, and put that: a. The Union had not discharged the onus of demonstrating a requirement for the making of the proposed Determination as sought; b. The evidence in the proceedings did not support the making of the proposed Determination; c. Grounds and reasons advanced by the Union were not adequate for supporting the making of the proposed Determination; d. Making a Contract Determination in the terms as sought would unfairly intrude upon the existing commercial arrangements struck between principal contractors and contract carriers; e. The extent of anomalies arising from a contract determination being made in the terms sought by the application were numerous and fraught with difficulty - a 'one size fits all' approach was not appropriate given the nuances of the transport industry and the various existing contract determinations related thereto; and f. The existence of current and alternative remedies available to carriers pursuant to the Act already provide adequate avenues of recourse for carriers who seek redress. In particular, AFEI strongly support the submissions of ABI at paragraphs 58 - 60 inclusive as they relate to The Smith Family and the operation of the Transport Industry - General Carriers (The Smith Family) Contract Determination. In reply 261 In oral submissions, Mr Hatcher put that there were three issues relevant to the generality of the application. 262 Firstly, the Commission is charged with, and has been for almost 30 years, the industrial regulation of carriers under Ch 6 of the Act. Accordingly, the application before the Commission must be determined on traditional industrial principles. This means that carriers should receive in their rates, either directly or indirectly, the minimum industrial standard benefits which apply to employees performing equivalent work. It was wrong to characterise this case as one about business or commercial considerations when the Parliament has expressly decided over many years to leave the industrial regulation of carriers to the Commission under the Act. 263 Secondly, the respondents' approach to the claim had been to run their case on an 'all or nothing' basis, even though the Union had amended its application to accommodate employer concerns as they arose. The respondents advanced no counter claim or alternative provisions and, by so doing, exposed themselves to substantial risk: See Re Health and Community Employees Psychologists (State) Award (2001) 109 IR 458. The Commission was given no assistance as to alternative ways of resolving the issues raised by the application. If the Commission found that an evidentiary case had been made out for the establishment of a new contract determination, the Commission would then consider what form it should take. In the absence of any alternative, the Commission would be attracted to the Union's proposal, particularly as it was amended during the course of the proceedings. Mr Hatcher submitted that the Commission could rewrite the application, but that would be an unsatisfactory alternative given that the parties had not been heard on what it might contain. 264 Thirdly, Mr Hatcher said it was significant that the main body representing the road transport industry, the RTA, did not call a single witness in the proceedings and only offered a token submission. He noted that four witnesses had come from the concrete sector which was a small sector in comparison to the total industry and which was, in any event, covered by termination arrangements more generous than what was sought in the application. 265 Mr Hatcher rejected what he claimed was an attempt by AIG and ABI to characterise the Union's claim as being inconsistent with the underlying industrial rationale for the award of redundancy pay. He referred to the foundation case, Shop, Distributive & Allied Employees Association (NSW) v Countdown Stores ('Crocker Decision') (1983) 7 IR 273, where Fisher P emphasised, among other things, that unemployment and income maintenance as justification for severance pay when a person was made redundant. This emphasis was repeated in Re Application for Redundancy Awards. Mr Hatcher maintained that this case was on all fours with that approach. He said that the comments in Westfield Holdings, even though it was a s 106 case, recongnised the rationale of payments in lieu of notice. Both approaches can be seen in the evidence in this case. The evidence disclosed the hardship and inconvenient effects of redundancy on carriers such as: * being encumbered with a truck for which there are ongoing costs; * the truck may have specialised equipment not readily transferable; * the owner driver may not be able to find alternative work or the alternative work might not meet the level of remuneration previously earned; and * the loss of regular or systematic work by casual work, in terms of the loss of transferable benefits, particularly in the context of any 'goodwill'. 266 Mr Hatcher said that for reasons which are not entirely clear, AIG submitted that carriers should be treated like casual employees, but failed to address the question of casual loadings. No proposal was advanced to include in the carriers' rate, a component for insecurity of employment, intermittency of engagement or in lieu of severance pay on retrenchment. AIG's comparison was entirely wrong and not supported by the evidence. 267 Mr Hatcher rejected any suggestion that the Union had not met the onus of proof in these proceedings. While putting that there was no legal burden of proof required in industrial proceedings, he accepted the evidentiary burden on the Union to justify its claim. He said that there was very little contest as to the facts in this matter which prove the three essential premises referred to in para 213 above. Mr Hatcher said that the respondents' cases were not that these premises had not been made out, but the determination should not be made for other reasons. 268 Mr Hatcher said that the Union was criticised for seeking a 'one size fits all' approach to redundancy. However, this suggestion was misplaced. The Union was simply seeking a minimum basic standard for redundancy such as that which applies to employees. The Union did not seek to disturb existing or future individual arrangements and the claim sought to recognise such arrangements by permitting offsetting. It was also suggested that the issue of redundancy was already attended to by the number of existing arrangements referred to in the evidence. However, this submission did not address the issue of companies which have no redundancy arrangements or completely inadequate ones. 269 Mr Hatcher dealt with the exemption for carriers engaged for specific periods of time or for a specified task/s by reference to the definition of engagement. The respondents had criticised the claim for not exempting fixed term contracts. However, Mr Hatcher said that the evidence disclosed that most fixed term contracts were ones where the engagement was for long periods of time, under repeated or rolled over fixed term contracts. In reality, the engagements were for ongoing engagements. This was an entirely different proposition to a truly fixed term contract where the parties know and understand a contract will end at the end of the fixed term. The Commission would not extend the exemptions for fixed term contracts where they are used simply as a mask to disguise what in reality was indefinite and ongoing engagement. 270 Mr Hatcher addressed further respondent criticism of the claim which was said to allow 'double dipping'. The Union had properly accepted that where a principal contractor makes a redundancy payment, pursuant to an agreement or a policy, it would be entitled to offset such payment against any redundancy determination made by the Commission. 271 Mr Hatcher accepted that a problem might arise where a payment on termination might not be actually described as redundancy pay, such as 'goodwill', payment for early termination of the contract or payments for the purchase of the truck. Sometimes the payments are rolled up into a single payment. Mr Hatcher said that the Union had sought to specifically address these issues by an amendment in cl 9. AIG had sought to address the issue by proposing a far too general exemption which was undefined and which sought to offset any termination payment at all, whether it was referable to redundancy or some other benefit which may have accrued during the engagement. This would be to give an exemption in advance without knowing anything about the actual arrangement. He added that in the event of any dispute, the issue could be taken to the Commission. 272 Mr Hatcher criticised the ABI submission which had sought to exempt casual contract carriers from the claim. He said firstly that while there was not a clear industrial distinction between casual and permanent contract carriers, the Union had properly addressed the issue by including an exemption for engagements which were not regular or systematic and less than six months duration. This wording was applicable to employees and he noted that no other party proposed any form of alternative wording. Mr Hatcher addressed the decision relied upon by ABI in the RTA Case. He said this case was about a very unusual situation based on historic circumstances and which did not involve true carriers. 273 In oral submissions in reply, Mr Hatcher said that the proposition that most carriers are not made redundant, so the application was unnecessary, was no answer to the claim. The task of industrial tribunals was to address circumstances which cause hardship as they arise. Mr Hatcher said that Mr Donnelly had correctly identified the hardship which arises when the carrier bears the risk in the event of redundancy. This was what was meant by the vulnerability of carriers as first identified in the Beattie Report. Some of the risk must be transferred back to the principal contractor. 274 Mr Hatcher emphasised that there are carriers on true fixed term contracts which are day to day or week to week. The amended application addressed this concern. But it was not fair for a carrier with ongoing engagements over many years being denied redundancy benefits. 275 Mr Hatcher said Ms Paul was wrong to suggest that there had been no case made out to move from a 'case by case' approach to redundancy. Mr Crosdale's uncontested evidence was that over the last decade, the incidence of carriers being covered by redundancy arrangements has fallen significantly indicating a 'case by case' approach was not working. 276 Mr Hatcher said that if the Commission was minded to grant an exemption to Mr Warren's clients it should do so only for the life of the agreements, but in any event, the offsetting provisions would apply and satisfy any issues of concern that might arise. CONSIDERATION Chapter 6 of the Industrial Relations Act 277 I propose to deal firstly with the origins of Chapter 6 of the Act and the relevant provisions now applying. 278 The equivalent predecessor provisions of Ch 6 of the Act arose from an inquiry conducted over thirty years ago, by the Full Bench of the then Industrial Relations Commission of New South Wales in Court Session (Beattie P, Sheehy and Sheldon JJ) and a report to the then Minister for Labour and Industry, the Hon E.A. Willis MP dated 23 February 1970 ('the Beattie Report'). The Full Bench had been required to conduct an inquiry into s 88E of the then Industrial Arbitration Act 1940 in so far as it concerned Drivers of Taxi-cabs, Private Hire Cars, Motor Omnibuses, Public Motor Vehicles and Lorry Owner Drivers. Chapter 30 of the Report (which is the only relevant section here) dealt with the conclusions and recommendations concerning lorry owner drivers. 279 As a result of the findings of the Beattie Report, the New South Wales Parliament amended the Industrial Arbitration Act 1940 to introduce a separate industrial regime for carriers entitled Regulated Contracts - Part VIIIA. The relevant provisions in the 1940 Act were carried over to the Industrial Relations Act 1991 (Chapter 6, Sections 678-685) and find their current manifestation in the 1996 Act in Chapter 6, Sections 306-331. 280 Counsel for the Union and a number of employer respondents referred to, and relied upon, the conclusions and comments found in the Beattie Report. Notwithstanding that the Report is almost 40 years old, and some employer respondents queried its relevance to the current industrial environment in the road transport industry, it is my belief that many of the Report's conclusions and findings are no less applicable today as they were in the 1960's and 1970's. 281 The following is a summary of the relevant conclusions: 30.13 The distinction in law between owner-drivers who are truly employees and those who are independent contractors is often a fine one with the line difficult to draw. The "grey area" is in practice really significant. 30.14 Many owner-drivers with one vehicle come under the direction and control of their principal in a way which in a practical sense is little different from the case of true employees. 30.15 Owner-drivers are often used in addition to, interchangeably with or in lieu of employees driving company-owned vehicles. This means that frequently they work side by side with employees doing identical work and subject to very similar control. 30.16 It is illogical in every practical sense that within the one section of industry and often within the one establishment work, which is virtually identical, should be done by employees subject to industrial regulation and owner-drivers outside its scope. This must lead to the dangers referred to in (c) above. 30.17 The evidence in the Inquiry has established that in a number of sections owner-drives have been in the past exploited as to rates and subjected to oppressive and unreasonable working conditions. 30.18 There is no doubt that owner-drivers have generally fared best in the sections where in effect there has been a form of industrial regulation through standard agreements which have been largely achieved through their ability to present an organized front. 30.20 For many years a substantial amount of industrial regulation of owner-drivers has in fact taken place. 30.21 The public interest requires that disputes between owner-drivers with one vehicle and their principal contractors should be speedily settled as there is no difference in the public dislocation caused by these disputes compared with employer-employee disputes. 30.22 Industrial regulation of owner-drivers with one vehicle will put on a proper legal basis what has been for many years an industrial fact of life. 30.23 The presence of the TWU in this area, the large influence exercised by it and the practical impossibility of eradicating this influence even if it were theoretically desirable in themselves create a need for industrial regulation. 30.24 Industrial regulation, although certainly not a panacea for the bad practices of overloading and speeding which are prevalent in some sections, must assist in reducing them. 30.25 Although the owner-drivers are independent contractors, to attempt to solve industrial disputes affecting them though the ordinary processes of law would be cumbrous and futile. 30.26 We believe that industrial regulation would be far from one-way traffic. When an agreement is negotiated to regulate the rates and conditions of owner-drivers, the settlement has clear advantages not only for the owner-drivers concerned but often also for the prime contractors who engage them. 282 The Report concluded: 30.27 These then are our basic reasons for recommending some form of industrial regulation for owner-drivers with one vehicle who are not themselves employers or in the common carrier class. We think they outweigh the views which we have set out earlier (ch. 12 passim) by the employers' organizations based on the philosophy that an owner-driver is an independent businessman or co-adventurer who has chosen to take his chance in a sphere of independent contract and should not be mollycoddled through extraneous control by industrial tribunals unless his contract is so unfair, harsh or unconscionable as to attract the Commission's jurisdiction under s 88F. ... In essence he has proved to be in section after section in the Inquiry more closely akin for industrial purposes to an employee than to an employer, entrepreneur or independent businessman. 30.29 Experience had shown many of them that the mantle of the independent businessman was ill-fitting and clearly they found their true parallel in the employee category. Owning a truck soon fades as a badge of independence where an industry uses it only to the extent necessary to meet its fluctuating needs and at the same time requires the owner to drive and obey instructions much like an employee. 283 The Report was also minded to comment on the circumstances which might apply if a carrier or a group of carriers were made redundant and how they might require some protection. At para 30.80 the Report said : Another case where owner-drivers with one vehicle might need protection (e.g. by way of severance pay) is where they are dispensed with on a wholesale basis in favour of employee-drivers or fleet-owners. This would depend on all the circumstances but, in our opinion, it would be wrong if a tribunal could not examine the matter and take such action as it thought justice required. An illustration of the replacement of owner-drivers by a contracting company will be found in Wholesale Liquor Delivery. 284 It might be said, (as was contended for by some employer parties), that this passage demonstrated the Beattie Report's preference for a 'case by case' approach to redundancy issues affecting carriers. However, I think it must be understood that the Report adopted an approach which was entirely consistent with the then prevailing industrial treatment of redundancy for employees generally. There can be no doubt, as I will shortly demonstrate, that the 'case by case' approach was the prevailing 'conventional wisdom' as to how industrial tribunals handled the redundancy of employees prior to 1983. 285 The jurisdiction of the Commission to make a contract determination is found at s 313(1) of the Act (as earlier referred to at para 11). 286 Section 315(1) and (2) requires the Commission to exercise its conciliation functions when an application for a contract determination is filed: 315 Conference to precede contract determination (1) When application is made to the Commission to exercise its jurisdiction under this Part, the Commission must, before it considers the application, summon to attend and confer with the Commission the applicant and such other persons served with the application as the Commission may direct. (2) At the conference, the Commission is to: (a) ascertain which of the matters with which the application is concerned are in dispute and which are not, and (b) ascertain whether there are any special circumstances or problems existing with respect to contracts of the class with which the application is concerned, and (c) take all reasonable steps to effect an amicable settlement of any matters in dispute. Section 316 provides for the making of a contract determination: 316 Making of contract determinations (1) After hearing an application for it to exercise its jurisdiction under this Part, the Commission may: (a) dismiss the application, or (b) make a contract determination with respect to the application. (2) When the Commission makes a contract determination: (a) it may defer the operation of the determination wholly or in part for such period or periods as it thinks fit, and (b) it must specify the class or classes of contracts in respect of which the determination is to operate (including classes defined by reference to a named bailor or principal contractor). Section 317 identifies who is bound to the determination: 317 Binding force of determination (1) Subject to such exemptions and conditions as the Commission may direct, a contract determination is binding on all bailors and bailees or all principal contractors and carriers who are parties to contracts of the class to which the determination relates as the Commission may direct. (2) A contract determination that is binding on a carrier which is a corporation is, except to the extent that the determination otherwise provides, also binding on: (a) any director of the corporation, or any member of the family of any such director, who personally does work under a contract to which the determination relates and to which the corporation is a party, and (b) any holder of shares in the corporation who personally does work under any such contract if that holder, together with the members of his or her family, has a controlling interest in the corporation, and (c) any member of the family of the holder of shares in the corporation who personally does work under any such contract if that holder, together with the members of his or her family, has a controlling interest in the corporation. Section 318 and 319 deal with the commencement and term of any contract determination made: 318 Commencement of determination (1) A contract determination comes into force on the date specified by the Commission. (2) However, legal proceedings relating to the enforcement of the determination cannot be commenced until the expiration of 7 days after the day on which it is published on the NSW industrial relations website. (3) A contract determination may be expressed to apply retrospectively, but not earlier than the date on which: (a) application for the determination was lodged with the Industrial Registrar or the Commission initiated proceedings for the determination, or (b) the Commission initiated proceedings for the determination, or (c) the dispute giving rise to the determination was notified to the Commission, as the case requires. Note. Section 190 enables the Full Bench or a Presidential Member, on such terms as it thinks fit, to stay the operation of the whole or any part of a contract determination for the purposes of appeal pending determination of the appeal or further order of the Commission. 319 Term of determination (1) A contract determination applies for the period specified in it as its nominal term and, after that period, until rescinded by the Commission. However, the Commission may specify that the determination ceases to apply at the end of its nominal term. (2) The nominal term of a determination must not be more than 3 years. Section 320 and 321 deal with the variation, rescission and exemptions under a contract determination: 320 Variation or rescission of determinations The Commission may vary or rescind a contract determination and, when it rescinds a determination, it may replace that determination with a new determination. 321 Exemptions from determinations (1) The Commission may, on application, grant an exemption from the whole or any part of a contract determination if satisfied it is not contrary to the public interest. (2) An exemption may be granted for a period not exceeding 3 years at any one time. (3) The Commission may, on application or on its own initiative, review any exemption, and may confirm, vary or revoke the exemption. 287 It is to be noted that an exemption to the making of this contract determination, as it applied to a number of named companies and the Waste Contractors and Recyclers' Association of New South Wales, was expressly sought by Mr Warren. History of General Redundancy Provisions for Employees in New South Wales 288 The first industrial tribunal in Australia to establish minimum redundancy pay standards for employees who are made redundant through no fault of their own, was the Industrial Commission of New South Wales. In responding to a serious economic recession in the early 1980's in which many employees were being retrenched, individually and collectively and without any redundancy entitlements, the New South Wales Parliament passed the Employment Protection Act 1982 (No 22). This Act as Fisher P described in the Croker decision: 'seems designed to remedy a clear deficiency in New South Wales awards relating to provisions concerning retrenchment, severance pay and ancillary relief'. Prior to this time, applications for redundancy awards and disputes about redundancy were dealt with on a 'case by case' basis by the Commission and were generally held not to be a precedent for other cases. However, his Honour, in the Croker case (which is now referred to as the seminal case in regards to redundancy standards) established a minimum scale of severance payments for employees made redundant due to the economic recession. The judgment also drew a distinction (and the possibility of a different scale of redundancy payments) between retrenchment caused by economic recession and for other reasons such as technological change or company restructure or merger. Unsurprisingly, the scale of payments became known as the 'Fisher formula' and became widely accepted in the industrial community. 289 Shortly thereafter, the 'Fisher formula' received legislative imprimatur in Reg 5B to the Employment Protection Act. The purpose was to exempt employers from notifying the Commission of retrenchments in circumstances where the 'Fisher formula' scale of payments was paid. It became further enshrined in the wider industrial context when the Australian Conciliation and Arbitration Commission ('the Federal Commission') adopted the 'Fisher formula' (although for slightly different reasons) for employees under Federal Awards in Termination, Change and Redundancy Test Case ('TCR Decision'). Other state industrial tribunals also followed suit. It is to be noted that the TCR Decision made no distinction between the various causes of redundancy. 290 The scale of minimum severance payments remained unchanged for about a decade until it was reviewed by a Full Bench of this Commission in Re Application for Redundancy Awards. In effect, that decision doubled the minimum redundancy / severance payments to redundant employees under the 'Fisher formula' such as to now provide as follows: Years of Service Entitlement Less than 1 year nil 1 year and less than 2 years - 4 weeks 2 years and less than 3 years - 7 weeks 3 years and less than 4 years - 10 weeks 4 years and less than 5 years - 12 weeks 5 years and less than 6 years - 14 weeks 6 years and over - 16 weeks Where employees are 45 years of age or over, payments are increased by 25 per cent. 291 Significantly, the judgment abandoned the distinction made in Croker between retrenchment caused by economic recession, technological change and company reconstruction and merger. This was done for reasons of comity (with the TCR Decision) and at the request of the parties. 292 This new scale of minimum redundancy pay provisions must now be included in all awards in the New South Wales jurisdiction by virtue of s 19 of the Act and the Commission's Principles for Review of Awards - State Decision (1998) 85 IR 38. The standard is further recognised by its adoption in the Employment Protection Regulation 2001 under the Employment Protection Act. 293 This scale has conceptually, and in reality, been accepted by the legislature and, in my view by the major industrial parties as a true minimum. Nothing prevents, nor has the minimum provisions ever prevented, any number of agreements, arrangements, policies or awards of the Commission from providing different, and invariably higher amounts of redundancy pay and other benefits for redundant employees. There would be hundreds, if not thousands of such examples and the evidence in this case amply demonstrates the point. 294 In addition, there has developed a body of well settled industrial principles which have dealt with other matters associated with the redundancy of employees. As I said in Shop, Distributive and Allied Employees' Association, New South Wales, and W D & H O Wills Holdings Ltd [2000] NSWIRComm 98 these principles require an employer to: 1. give reasonable notice to employees and/or their Unions; 2. adequately consult with employees and/or their Unions on the impact of the proposed changes; 3. explore genuine alternative options for redundancy, such as redeployment or relocation; 4. ensure such options are fairly offered to the affected employees; 5. provide reasonable standards of redundancy benefits; 6. provide appropriate ancillary services, such as time off to seek alternative work, retraining opportunities, outplacement services or financial planning; 7. ensure employees nominated for redundancy are fairly selected on an objective and unbiased basis. Consideration of the primary arguments 295 It seems to me that a convenient way of determining an outcome in this case is to identify each of the primary arguments, as I understand them, as advanced by the respondent employers and consider them in turn. Carriers are not employees and their commercial relationships, including business risk, make it inappropriate to apply employee benefits, such as redundancy entitlements to them. 296 It must be of some noteworthiness that the legislature itself seems to have recognised and accepted that redundancy payments paid to carriers by principal contractors are a feature of the road transport industry. This may be evinced from s 349(4)(b) of the Act. This section requires the Contract of Carriage Tribunal, when assessing whether compensation should be paid if a contract of carriage is unfairly terminated, to have regard to the following matters: (a) the amount of the premium or fee paid by the carrier as referred to in section 346, (b) any amount paid to the carrier by the principal contractor ( including but not limited to redundancy payments ) in respect of the termination of the head contract of carriage, whether or not such payment was made expressly on account of the payment of that premium or fee,... (my emphasis) 297 It is trite to observe that there are quite different commercial and industrial considerations which apply to carriers as distinct to employees. The differences are manifested most starkly in the specific industrial code provided for carriers under Ch 6 of the Act. There are, of course, other characteristics of carriers which are akin to those applying to employees - control and direction by the principal contractor, including the power to terminate an engagement are obvious and significant ones. The evidence of Mr Ward is instructive in this regard when he said in his affidavit evidence: Concrete LODs are all but employees in many ways. They (a) operate in and around our company vehicles; (b) have their vehicles painted in our colours;' (c) their prime mover is fitted with our mixed which unlike a tipper or tanker trailer is an integral and permanent part of the unit; (d) wear our uniforms and are more than simply unloading the product but also maintain a customer service element to the discharge process; and (e) often are required to purchase specific aged or capacity assets (assets that are not very versatile for other functions). 298 Further the Beattie Report observed at 30.27 'In essence he has (the carrier) proved to be in section after section in the Inquiry more closely akin for industrial purposes to an employee...'. 299 On one view, the point is not necessarily that employees and carriers are different, but whether the impact of redundancy is similar for carriers as it is for employees and, if it is, whether the minimum remedy for redundancy, as now universally recognised as appropriate for employees, should be applied as minimum standards for carriers who find themselves in similar circumstances. The impact of redundancy will likely result in similar hardship and inconvenience to carriers and their families as it does for employees (albeit arising from different factors). Accordingly, I consider there is no substance to the argument that a minimum regime of redundancy entitlements should not apply to carriers merely because they do not neatly fit into the definition of employee. The award of redundancy pay to carriers would be inconsistent with the rationale of redundancy pay awarded to employees under awards. 300 The rationale for the award of redundancy pay amounts to a combination of both compensation for the loss of non-transferable credits, such as sick leave and long service leave and to assist with the hardship and inconvenience of losing a job. It has never been the intention to attribute a specific proportion of the redundancy pay calculation to any of the components as to its purpose. This Commission has also held that severance payments were aimed at providing temporary assistance to redundant employees during a period of unemployment. See Croker and Re Clerks (State) Award & Other Awards (1987) 21 IR 29. This latter objective was specifically rejected by the TCR decision when the Full Bench of the Federal Commission said: We do not believe that the primary reason for the payment of severance pay relates to the requirement to search for another job and / or to tide over an employee during a period of unemployment. It was held that this purpose was contemplated by the provision of notice or the payment in lieu thereof. This latter approach was said to have now been endorsed by this Commission in Westfield Holdings v Adams where the Full Bench said: In our opinion, these authorities persuasively demonstrate the distinct functions to be served by awarding a payment in lieu of notice and a payment in the nature of redundancy or severance. Whilst a period of notice, or payment in lieu, is directed at supplementing the income of an employee immediately following termination, the focus of a redundancy or severance payment is to compensate an employee for the loss of non-transferable benefits and for the inconvenience and hardship imposed by the termination. This is, in our view, not merely an additional purpose, but rather the dominant function of a redundancy or severance payment. The fact that an employee may apply redundancy or severance payments to supplement the employee's income during a period of unemployment, or to support the employee and their family, does not alter the purpose of those payments being made. In many instances, an employee will, of necessity, be forced to draw on any available resources during a period of unemployment. The purpose of making a redundancy or severance payment is, nonetheless, qualitatively different to providing for the employee during this time. 301 One would obviously observe that the question of giving appropriate notice to redundant carriers is a relevant and integral component of any redundancy situation. On one view, the fact that a redundant carrier retains a specific capital asset in the truck, for which particular and unique difficulties arise might make the issue of notice a more acute consideration to a redundant carrier than the redundant employee. Presumably, that is why the provision of notice, as was evident in this case, is a feature of many agreements, with some having a 12 week notice provision. It is to be noted that there is no provision providing minimum notice in the Union's application, unlike that which is provided for in the Award. The claim merely provides for reasonable notice or payment in lieu thereof: See cl 6(iv). Granting the claim will impose additional costs on principal contractors in circumstances where markets are very competitive and margins are small. 302 It is to state the obvious that the payment of redundancy pay to carriers will, by definition, increase costs for principal contractors when it is required to be paid. However, it is equally true that every monetary claim approved by the Commission will result in some cost for the respondent/s to the claim. Of course, the costs of redundancy will only ever be realised in the actual event of redundancies being necessary. In other words, it is not a contingent liability. The fact that redundancy pay is so treated for accounting and tax purposes demonstrates this reality. While a prudent employer / principal contractor might accrue for the liability, the evidence is that it is not usual for employers to do so. Moreover, in light of the evidence in this case that carriers are rarely made redundant and a number of major companies have significantly enhanced redundancy benefits already in place, the cost to the industry is not a sufficiently telling factor which would mitigate against the grant of the claim which, in any event, only provides minimum standards already applicable to employees who may be employed by the same principal contractor. The Union has been unable to demonstrate any need for general redundancy arrangements for carriers in circumstances where it is rare for carriers to be made redundant and, in any event, the issue of redundancy can be addressed on a 'case by case' basis. 303 It is no answer to the claim for general redundancy provisions for carriers that because the redundancy of carriers is rare, the claim is unnecessary and ought not be granted. The evidence was that carriers have been made redundant in the past and it is impossible to say they won't be in the future. In addition, I accept the uncontested evidence of Mr Crosdale that the proportion of carriers covered by redundancy arrangements has diminished in recent years due to industry restructuring and a reluctance by the new major operators to enter into negotiations for new agreements with the Union on redundancy. It is also necessary, in my opinion, to establish minimum standards of redundancy entitlements for carriers who do not have the industrial capacity to negotiate any redundancy arrangements at all with principal contractors. 304 There is no intention by the Union (if the application is granted) to interfere with redundancy arrangements under existing agreements or contract determinations. Indeed, the claim expressly protects such arrangements. Nor would the grant of the claim prevent the Union or an individual carrier from negotiating specific redundancy arrangements relevant to individual circumstances or locations. In other words, the grant of the claim would not preclude the continuation of a 'case by case' approach in appropriate circumstances. This result would be entirely consistent with the unexceptional industrial reality that the setting of minimum redundancy standards for employees does not, and has not prevented different arrangements being negotiated to reflect particular circumstances. The amended application does not sufficiently address the respondents' concern that certain termination payments would not be able to be offset. 305 The Commission accepts that the evidence disclosed at least two payments paid by Boral - a vehicle payout payment and a company dissolution payment - have the character of termination payments and only arise at the point of termination. I also accept that there may be arguments as to the value of the vehicle or whether 'goodwill' should be considered in the context of the payment of redundancy payments. In my assessment, there is ample industry sophistication, particularly in the relationships between the Union and the major industry operators, for the parties to arrive at an agreed position in what, I apprehend, will be relatively rare instances. In any event, there is available scope within the legislative framework under the Act and the dispute setting procedures under contract determinations for issues in dispute to be resolved by recourse to the Commission if necessary. 306 Further, in my view, the Union's amended claim and Mr Hatcher's concession in submissions (which I reproduce below) as to the meaning of 'termination payment' in Cl 9(iv) of the claim is sufficient to address the substantive concerns of some employers concerning the capacity to offset the requirement to pay redundancy pay when other termination payments are paid. Mr Hatcher's concession was recorded at page 27 of the transcript of 11 December 2006: "A termination payment for the purposes of subclause 9(iv) means any payment made by the principal contractor to the contract carrier on termination of the contract and includes any severance pay or redundancy pay." The claim should be further amended to reflect this concession. The amended claim does not recognise that one feature of the industry are fixed term contracts which should not attract considerations of redundancy. 307 In my assessment, this issue is the one that has the potential to be the most problematic as far as disputation and argument is concerned. The Union acknowledged that the claim was not directed towards carriers who are engaged for a particular job, or on a day-to-day or week-to-week basis. The claim recognises that to be eligible for redundancy pay a carrier must have been working on a regular or systematic basis for more than six months. However, there is some force to the argument that a carrier who enters into a truly fixed term contract and whose contract ends at the conclusion of that contract, should not ordinarily be entitled to the payment of redundancy pay. It is plain that the redundancy test cases of this Commission have drawn a distinction with employees generally and those on fixed term contracts. 308 However, there was also evidence, and from my own experience, which I accept as a matter of judicial notice, that there are many examples of where the carrier works regular hours, performing the same work, for regular income and where the contract is simply rolled over, year after year, with little or no renegotiation of the contract terms and, in circumstances where both the carrier and the principal contractor have settled expectations of ongoing engagements. This circumstance was described by a Full Bench of the Commission in Transport Industry (General Carriers) Contract Determination - Appeal by Transport Workers' Union of Australia, New South Wales Branch at page 161 as the carrier being bound to the principal contractor. The Full Bench explained: ...they (a contract of carriage) can also extend to a circumstance where a contract carrier is, in every practical sense, bound to the principal contractor on a continuing basis, often for many years. Examples of the latter would be where the carrier's vehicle is painted in the principal's or the client's colours; the carrier is obliged to present (or be available for work) each working day and perhaps where the carrier is not permitted to carry a competitor's product in the vehicle and other circumstances including the fact of a pattern of continuity or availability itself. 309 The Union might have slightly over dramatised these situations by referring to them as a 'sham' or 'a mask to disguise arrangements designed to give the principal contractor the power to terminate a carrier of many years standing without notice and no redundancy payments'. However, I would hope these characterisations are not commonplace. On the other hand, there is no doubt in my mind, that the situation outlined above is not, in reality, a truly fixed term arrangement which should disqualify such a carrier from minimum protections in the event of redundancy. I am satisfied that the definition of engagement proposed by the Union captures the real intent of short, fixed term engagements. In any event, it must be noted that no entitlement to redundancy pay arises under one year's service under the scale of payments proposed in the claim. The Union's definition of a weeks pay will result in 'double dipping'. 310 There was some debate about the definition of a weeks pay for the purposes of calculating redundancy pay. This arose from the complex and unique way that remuneration is calculated having regard for the particular relationship between a principal contractor and a carrier. The calculation has three components: labour, fixed costs and running costs of the vehicle. These components are identified in Schedule 1 to the General Carriers Contract Determination and include wages; overtime - in excess of 40 hours each week; annual leave; long service leave; public holidays; picnic day; sick leave; return on capital invested; depreciation; lease costs; registration and compulsory third party insurance; comprehensive insurance; public liability insurance; personal accident insurance; administrative overheads; fuel; oil; tyres; repairs and maintenance and industry-specific allowances. The labour component includes factors such as wages, sick leave, annual leave, public holiday and long service leave. Fixed costs are the costs of whether work is performed or not and running costs are those costs that are incurred in performance of the work. 311 The Union proposed to average the annual gross remuneration received by the carrier less the percentage amounts for running costs which are found in the General Carriers Contract Determination. These percentages range from 21% to 28.52% depending on the type of vehicle. The result represented fixed costs, less running costs. There was a suggestion by one employer witness, that the labour component in the general carriers' remuneration was in fact a running cost. This suggestion was contradicted by other employer witnesses and later withdrawn. I am satisfied that it is appropriate to regard a weeks pay for the purposes of calculating redundancy pay as all those components of the carriers' rate, including labour, except for the running costs. It seems to me that the Union's proposed definition appropriately recognises, for the purposes of redundancy, the concept of a weeks pay as generally understood by the industry. 312 While it may be true that the carrier rate comprehends a component for the loss of non-transferable credits, that is, it includes a component for sick leave and long service leave, there still remains the element of hardship and inconvenience imposed on a redundant carrier. It must not be lost sight of that what is sought in this application are minimum redundancy entitlements. When viewed in this light, I do not consider the claim should be rejected because one purpose of redundancy is comprehended in the rate of remuneration. It is also pertinent to note that in the examples of company based agreements and contract determinations which provide for redundancy pay, no discount or offset is made either expressly or implicitly, for that component of the remuneration rate in respect to sick leave, annual leave and public holidays. 313 I would add that the nature of the hardship may be more acute for a redundant carrier than an employee because of the loss of 'goodwill', the difficulty in finding alternative work for a truck which has been fitted or converted for a specific purpose and the truck retains ongoing costs regardless of whether it is utilised or not. It is also apparent that a redundant carrier may be restricted to finding alternative work in the transport industry because of the encumbrance of his / her capital asset - the truck. The Commission's findings 314 From the evidence which was adduced during the course of these proceedings and the submissions of the parties, I consider that the following observations and findings can be made. These are not listed in any particular order of significance. 1. Carriers make up about 25-30% of the road transport industry in New South Wales. 2. Carriers are usually engaged in one of two ways: as permanent carriers who may be engaged over a long period of time and where contracts are renegotiated or rolled over. These carriers generally have an expectation of ongoing employment and are directed as to how and when they carry out the requirements of the principal contractor and usually have guaranteed hours of work and income, and secondly, as casual hire carriers who may be engaged on short term contracts on an 'as needs' basis. The hours and income of casual carriers are variable. 3. In more recent times it has been rare for carriers to be made redundant due to a downturn in work. This may be attributed to one or more of the following factors: (a) Transport operators are not immune from prevailing economic circumstances. The general economic environment has undoubtedly been more favourable in the last 5 - 10 years compared to the early 1980's and 1990's. (b) Many large transport operators use a combination of employee drivers and carriers in their fleets and generally carriers comprise the core of the fleet. Any need to adjust the numbers of drivers due to a downturn in work or other factors is usually addressed by reducing the employee driver numbers. (c) It can be more costly for a principal contractor to terminate a carrier in preference to an employee driver. 4. Redundancy arrangements for carriers are not unique or novel to the industry. Those which do exist have been tailored to meet particular commercial and industrial circumstances. 5. The legislature has recognised that the payment of redundancy pay to carriers is a feature of the road transport industry: See s 349(4)(b) of the Act. 6. Existing redundancy benefits for carriers are significantly greater than those which are sought in this application, including at least one large operator which has had a policy on redundancy since 1992 which includes a usual minimum payment of three weeks per year of service. 7. It is unlikely that the grant of the claim will have any significant short to medium term cost implications for the industry. 8. Due to industry restructuring in the last decade, the proportion of carriers covered by negotiated redundancy agreements or company policies has declined, although it is not possible on the evidence, to estimate by what proportion. 9. Many of the new major industry operators have no redundancy arrangements in place for carriers. 10. The Beattie Report identified that carriers were a vulnerable group of workers who required special protections through industrial regulation: See para 30.17 of the Beattie Report. That contention holds good today as was expressed by the Federal Minister for Workplace Relations when, on behalf of the Commonwealth Government he said last year: The Government recognises that owner drivers, like outworkers, have historically been recognised as having particular vulnerabilities and requiring special protections. (Media Release: 3 May 2006, the Hon. Kevin Andrews, Minister for Workplace Relations.) 11. The Union's claim does not seek to increase redundancy payments beyond those applying as a minimum entitlement to employees established 13 years ago under awards of this Commission. The application limits the entitlement to carriers who have been engaged on a regular or systematic basis for more than six months. Consistent with the approach in Re Redundancy Awards , there is an incapacity to pay provision, a provision relating to alternative work, and an offsetting provision where existing termination arrangements apply. 12. Extending minimum redundancy entitlements has traditionally been regarded as an evolutionary process. As Fisher P said in Croker at p 293 ' the remedy of severance pay will need to undergo the same evolutionary development as other forms of industrial amenity and compensation '. 13. The actual remuneration of carriers is generally higher than that of employee drivers. However, the criterion for the setting of minimum redundancy entitlements for employees was not based on the income of the employee. This is consistent with the contemporary rationale that redundancy pay was to compensate for the loss of non-transferable credits. There is no sound basis why a redundant carrier's income should be taken into account when deciding whether minimum redundancy benefits should apply to carriers. 14. The remuneration of carriers includes a component for labour which has regard to employee entitlements such as sick leave, annual leave, long service leave and public holidays. Labour is a fixed cost and not a running cost. There is no account taken in respect to redundancy or severance pay. 15. There are elements of hardship and inconvenience experienced by carriers who are made redundant. While some factors which cause the hardship and inconvenience faced by redundant carriers are different to redundant employees, there is no reasonable basis to conclude that redundant carriers do not suffer the same degree of hardship and inconvenience as redundant employees. For example: + the difficulties in finding alternative work, particularly where the carrier has specialised equipment, or where there is a general economic downturn; and + the standing costs associated with maintaining an idle vehicle during periods of unemployment. 16. The approach in the Beattie Report and subsequent decisions of the Commission was to provide, as far as was practicable, similar benefits, either directly or indirectly, to carriers as applied to employees. The Beattie Report said at para 30.77: In essence our view is that an owner-driver is entitled either to receive annual leave, long service leave, sick leave and payment for public holidays or to have his rate loaded in these respects provided always that it is not already sufficient fairly to cover these matters. We believe that most owner-drivers would prefer a loaded rate. Occupational superannuation was extended to certain carriers as a result of a decision of Connor C in Re Transport Industry - Courier & Taxi Truck (Superannuation) Contract Determination (unreported, 4 November 1999, IRC98/5280) where the Commissioner said at page 67: Mr Hatcher submitted that it is fair, equitable and just that standard occupational superannuation available to employees covered by State awards be extended to contract couriers. I consider that it is difficult to argue against that proposition which, to my mind, follows the policy in the Beattie Report - to relate the labour component of remuneration - including for that purpose, to my mind, superannuation - for contract couriers to comparable employees. Other matters to be considered 315 During the course of the respondents' submissions reliance was placed on a decision of the Commission in Roads and Traffic Authority - Owner Drivers' Employment Protection Award (the 'RTA Case'). Shortly stated, in that decision the Full Bench of the Commission rejected an application made by the Union for an award of redundancy pay for lorry owner drivers who were engaged by the RTA. 316 On a proper reading of that decision, it is my opinion that the facts and circumstances of that case can be readily distinguished from the present application for the following reasons. 317 The Full Bench in the RTA Case rejected the claim on discretionary grounds, in circumstances where, firstly, an award was being sought in respect of an industry whose entire history had been one of non-award coverage, specifically sanctioned by the parties. In the present case, by way of contrast, a contract determination is being sought in respect to an industry which is heavily regulated by a general industry contract determination and numerous company or enterprise specific contract determinations. 318 Secondly, the claim in the RTA case was for higher severance payments (four weeks notice, two weeks for each year of service to a maximum of 26 weeks pay) than the then minimum redundancy standards established by this Commission in the Croker Decision. The present application seeks no more than the current minimum redundancy pay standards of this Commission for employees as established in Re Redundancy Awards. 319 Thirdly, the Union's claim sought severance payments for whatever the reason/s for the termination of the contract. In other words, there was no attempt to refine or restrict redundancy / severance payments to terminations arising from genuine redundancy. This is plainly not the case in the present application before the Commission. 320 Fourthly, and probably the most decisive reason, there was a curious and unusual seniority system in place for the RTA carriers in which those drivers at the top of the seniority list were offered work on a regular basis, while others lower down the list would be offered work less frequently, allowing them to undertake work elsewhere. The claim, however, sought redundancy pay after two years service or engagement of 370 working days for all carriers. The Full Bench said that this proposal demonstrated that the claim was substantially flawed on equity grounds. There was no evidence in this case that this practice of seniority (or anything like it) exists in the contemporary road transport industry. 321 For all these reasons, I find that reliance on the RTA Case is of no assistance to the respondents in the present matter. 322 The Commission has been unassisted by the employer respondents as to alternative provisions or wording to address perceived difficulties with the claim (save for one minor exception from AIG). In these circumstances, I agree with Mr Hatcher that the respondents place themselves at some risk of the claim being accepted, particularly where the applicant has gone to some trouble to amend its application as genuine concerns have been raised. To my mind, this situation is analogous to that described in Re Health and Community Employees Psychologists (State) Award (2001) 109 IR 458 where the Full Bench said: The respondent's position was to oppose any change in the classification structure or any increase in salaries; it proposed no alternative to the applicant's claims. As unfortunate as that approach may be in not providing the Commission with an arguable alternative, we have to say it has compelled us to accept more forcefully than we might otherwise have done the evidence led in these respects by the applicant. 323 Mr Warren sought an exemption from the application for WCRA and the companies he represented. I am comfortably satisfied that the concerns of Mr Warren's clients are well accommodated by the terms of the amended application itself. Moreover, in view of my reasoning in this decision, I do not apprehend there to be any practical reason why Mr Warren's clients warrant any different consideration to those employers who have acknowledged that the application is unlikely, if at all, to have any impact upon them. I emphasise that if there is any dispute arising from the grant of the application as to existing redundancy arrangements and offsetting, the issue can be dealt with under the disputes procedure of the relevant contract determination, including recourse to the Commission. The exemption application is refused. 324 Finally, the employer opposition to the claim was almost exclusively focussed on the requirement to pay redundancy pay. No evidence was brought in opposition to the provisions in the claim relating to consultation and notice. Moreover, Mr Dunne seemed to concede that the claims relating to consultation and notice might be approved by the Commission. He put, somewhat obliquely, that the New South Wales Road Transport Association neither supported, or opposed those aspects of the claim. 325 For reasons herein expressed, I am satisfied that the Union has established a sound evidentiary basis for the grant of the claim in terms of Annexure 1 to this decision. I propose to make a new contract determination in those terms, subject to the amendment referred to in para 306 of this decision. 326 The contract determination will take effect from 2 August 2007 and remain in force for a period of three years thereafter. The Union is directed to file and serve draft orders within seven days giving effect to this decision. Peter J Sams, AM Deputy President ====================== Annexure A 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.