Industrial Relations Commission of New South Wales CITATION: Transport Workers' Union of New South Wales v. Boral Transport Limited [2009] NSWIRComm 1001 APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT Boral Transport Limited FILE NUMBER(S): IRC 2221 of 2007 CORAM: Connor C CATCHWORDS: industrial dispute - transport industry - quarry operations - south coast region - negotiations for a new contract determination - leave reserved provision - rates of remuneration - living-away-from home on allocated work - compensation for times trailer is under repair or maintenance - supplementary decision LEGISLATION CITED: Industrial Relations Act 1996 CASES CITED: 1996 Taxi Industry (Contract Drivers) Contract Determination Case - unreported Transport Workers' Union of New South Wales v. Boral Transport Limited [2008] NSWIRComm 1082 HEARING DATES: 19/12/2008 DATE OF JUDGMENT: 20 January 2009 APPLICANT Richard Olsen Transport Workers' Union of New South Wales LEGAL REPRESENTATIVES: RESPONDENT Nigel Ward Boral Transport Limited DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Tuesday, 20 January, 2009 Matter No IRC 2221 of 2007 Transport Workers' Union of New South Wales and Boral Transport Limited Notification of an industrial dispute under S.332 of the Industrial Relations Act, 1996 re negotiations for a new contract determination SUPPLEMENTARY DECISION [2009] NSWIRComm 1001 Background 1 Boral Transport Limited engages contract drivers in a fleet for the transport by road of quarried material - sand, gravel and road base. That material is mostly carted from Boral owned quarries to Boral owned concrete plants and external customers within the Sydney metropolitan areas, the Illawarra region and other country regions. The Sydney metropolitan hauliers are based at a quarry in Emu Plains, a rail terminal in St Peters and the Windmere recycling depot; hauliers for the south coast region of New South Wales are currently based at Boral's Port Kembla depot or the Berrima plant of Blue Circle Southern Cement Limited. (At the time of the hearing of the matters the subject of this decision - Friday, 19 December, 2008 - the Boral Port Kembla depot was scheduled to close on Wednesday, 24 December, 2008 and the hauliers and employees who are currently based there will transfer to the Boral Dunmore quarry site. I understand that transfer has since occurred.) 2 There are 33 hauliers (and 30 employees) in the Sydney metropolitan fleet of Boral and 6 hauliers (and 21 employees) in the Boral south coast fleet. There is a variety of vehicle configurations for the Boral contract drivers and employees, viz: * 25 metropolitan hauliers and all 6 south coast hauliers use a prime mover with no body attached which they own and to which a Boral owned tri-axle trailer is attached; * 8 metropolitan hauliers use a prime mover which they own with a tipper body to which a Boral owned dog trailer is attached; * 17 metropolitan employees and 15 south coast employees use a Boral owned prime mover with a tipper body to which a Boral owned dog trailer is attached; * 11 metropolitan employees and 4 south coast employees use a Boral owned prime mover with no body to which a Boral owned tri-axle trailer is attached; and *2 metropolitan employees and 2 south coast employees use a Boral owned prime mover with no body to which a Boral owned B double trailer is attached. Therefore, Boral supplies all of the hauliers with trailers. It nevertheless requires them to meet the cost of the tyres and replacement covers for the loads in those trailers. 3 On Tuesday, 30 September, 2008 I made a new contract determination - the Boral Transport Limited Haulier Contract Determination - to reflect an agreement reached between the Transport Workers' Union of New South Wales and Boral Transport Limited. Those proceedings arose following notification by the TWU under Part 4, Dispute Resolution, of Chapter 6, Public Vehicles and Carriers [S.332] of the 1996 Industrial Relations Act. It is a term of that contract determination - Clause 21, Leave Reserved - that the parties may make application with respect to three matters, viz: (i) the appropriate rates prescribed for the Sydney metropolitan area [Schedule 1], the south coast region [Schedule 2] and other parts of New South Wales [Schedule 3]; (ii) living away from home arrangements; and (iii) arrangements when a trailer is unreasonably unavailable to perform cartage work due to maintenance or repair. With respect to those three issues, I indicated that I would reconvene these proceedings on Friday, 31 October, 2008 (in Wollongong) to deal with those issues either by conciliation or, if necessary, arbitration. In fact, at the request of the parties I vacated those proceedings on Friday, 31 October, 2008 and set them down instead for the conference required by S.315 on Monday, 17 November, 2008 (also in Wollongong). 4 Conciliation failed to resolve the matters. The three issues remain in dispute. I programmed the matters for arbitration on Monday, 15 December, 2008 and Tuesday, 16 December, 2008 (in Wollongong) but those dates were vacated at the request of the parties and the hearing adjourned until Friday, 19 December, 2008 (in Sydney). Mr Olsen represented the TWU in those proceedings. Mr Ward represented Boral in the proceedings, calling Mr Doug Harris, the business development manager of Boral as a witness. 5 It is my understanding that, whilst the new Boral Contract Determination has operation for Boral throughout New South Wales, the three unresolved matters which are the subject of the leave reserved provision, and this hearing, concern only the Boral south coast hauliers and that the Sydney metropolitan hauliers have accepted the new Boral Contract Determination in its entirety. That does give me some cause for concern. On its face, there appears to be no reason to draw any real distinction between the two groups of hauliers over most matters - although there is a distinction drawn between the rates of remuneration for the metropolitan hauliers [Schedule 1], the south coast hauliers [Schedule 2] and hauliers for other parts of New South Wales [Schedule 3] to which I will refer shortly in this decision. 6 That having been said, I would expect that the conditions of engagement applying to the metropolitan hauliers should equally apply to the south coast hauliers and vice versa. In one sense, it appears to be a case of the tail (the 6 south coast hauliers) wagging the dog (the 33 metropolitan hauliers). 7 But at the same time the fact that one group of hauliers has accepted the arrangements in the new contract determination, without any involvement of the Commission by way of arbitration, should not act to preclude another group from pursuing a claim of that nature through the TWU. Nor should it preclude the Commission from granting it if it is a legitimate claim. Agreements reached between the parties do not necessarily bind the Commission and the issues which are the subject of the leave reserved provision have not really been ventilated before the Commission in arbitrated proceedings. The Rates of Pay 8 The rates of remuneration for the Boral contract drivers were set in 1998 in a contract agreement between Boral and the TWU. Whilst the contract agreement is referred to as a S.322 contract agreement, it has not at any time come before the Commission for approval and, by virtue of S.323, that does mean it has no legally enforceable operation in the Commission. Nevertheless, the parties have worked under it since 1998. According to Mr Olsen, in recognition of the fact that Boral supplied the hauliers with trailers, the rates of remuneration in the agreement were set at 25% below the comparable rates prescribed under the Transport Industry Quarried Materials &c Carriers Contract Determination. Since that time the rates of remuneration have been adjusted to reflect movements in the Consumer Price Index but, according to Mr Olsen, it has not kept pace with the Quarried Materials Contract Determination. 9 In any event, Mr Olsen challenges that 25% differential as appropriate for the hauliers. He argues in written submissions that the Boral hauliers should receive higher remuneration, viz: "....Although the rate in 1998 was 25% below the Quarried Materials Contract Determination, we believe that this deduction was too high and any deduction should have been in the order of 5% to 10%. The formula in the contract determination does not calculate a percentage for the trailer or its usage. From 1998 to 2008 all costs have increased significantly which has been reflecting in the movements of the contract determination. However, the Boral unregistered agreement has not accounted for the overall movement in costs. Currently the rates proposed in the new Boral Contract Determination are set at approximately 35% or more below the Quarried Materials Contract Determination. It is the union contention that the rate for the Wollongong drivers should be no more than 15% below the current rate as defined in the Quarries Contract Determination..." Based on his calculations, it is Mr Olsen's argument that the contract drivers under the new Boral Contract Determination are inadequate. As I indicated earlier in this decision, he has nevertheless confined his claim to the south coast hauliers alone. 10 For contract determinations in the transport industry generally I have consistently taken the view that the prima facie position should prevail as far as the calculation of rates of remuneration for contract drivers, ie any existing formulas should be retained until there is evidence to change that formula. For instance in my unreported decision of Monday, 23 December, 1996 in the 1966 Taxi Industry (Contract Drivers) Contract Determination Case [Matter No.IRC 1959 of 1996] I commented (at pp.7 and 8) that: "....it is certainly time to grasp the nettle for a major overhaul of the contract determination for taxi drivers which no longer appears to me to reflect the current state of the industry... In the meantime, and until such times as something better is worked out between the parties or arbitrated, the existing formula is all I really have to go by..." But Mr Ward has argued that the alleged 25% differential has never had the status of a formula for the calculation of the rates of remuneration for the Boral contract drivers. 11 In his evidence Mr Harris has indicated that at no time did Boral take into account the Quarried Materials Contract Determination when it assessed the rates of remuneration for the Boral hauliers. He claimed that the 1998 Boral Contract Agreement stood alone and any relationship it had with the Quarried Materials Contract Determination was purely co-incidental. Mr Harris argued that it was entirely market forces which dictated that rates of remuneration for the Boral hauliers and the fact the different rates of remuneration applied for the metropolitan hauliers and the south coast hauliers was because different factors applied for the purchase and maintenance of vehicles in the different regions. 12 Mr Harris' evidence in this hearing provided much valuable data which confirms the reasons for the difference in the rates of remuneration for the metropolitan hauliers and the south coast hauliers. For instance, he has assessed that during a period of review - from Tuesday, 1 July, 2008 to Sunday, 30 November, 2008 - the metropolitan hauliers performed an average of 504 trips, the average of each trip being 64 kilometres. During that time they worked an average of 52 hours per week, travelled an average of 32,293 kilometres and earned an average of $21,800.00 per month ($3.37 per kilometre). By comparison, during that same period the south coast hauliers performed an average of 382 trips, the average of each trip being 99 kilometres. During that time they worked an average of 51.3 hours per week, travelled an average of 37,759 kilometres and earned an average of $23,552.00 per month ($3.12 per kilometre). 13 Mr Harris has assessed the cost of maintenance for prime-movers and trailers (inclusive of tyres, mechanical servicing and mechanical repairs) in Boral's own fleet of vehicles over the period from Tuesday, 1 July, 2008 to Sunday, 30 November, 2008 at 75 cents per kilometre for the metropolitan fleet and 58 cents per kilometre for its south coast fleet. Mr Harris has asserted in a written statement which formed the basis of his evidence that: "....Boral records do not suggest that the average maintenance cost per kilometre for a vehicle in the south coast fleet (over the life of a vehicle) be any greater than a vehicle in the metropolitan fleet..." According to Mr Harris' assessment, average fuel costs for the metropolitan fleet and the south coast fleet are comparable - 52 cents per kilometre for the metropolitan fleet and 53 cents per kilometres for the south coast fleet. Living Away from Home 14 The TWU is seeking that the following provision be inserted in the new Boral Contract Determination: "Contract carriers engaged on work which precludes them from reaching their home at night shall be paid all reasonable and actual expenses incurred in obtaining accommodation for the night, including an evening meal, bed and breakfast, providing the contract carrier submit to Boral Transport an itemized list with supporting account paid by the contract carrier or where the contract carrier has an approved sleeper berth an allowance of $40.00 per night shall be paid." 15 Times when Boral hauliers may be required to travel overnight are apparently rare. Mr Harris indicated in the written statement which formed the basis of his evidence in this hearing that: "...the day-to-day work undertaken by both south coast hauliers and metropolitan hauliers in carting quarried materials for Boral does not require them to undertake work which would prevent them from reaching their home of an evening. I am aware of no occasion at all where a south coast haulier or a metropolitan haulier has undertaken work involving the cartage of quarried materials for Boral which has prevented a haulier from reaching his home of an evening..." 16 Nevertheless, Mr Harris also spoke of occasional "country work" in his evidence. He records: "...In the past, when work has been quiet, hauliers have gone to country areas to cart quarried materials and agricultural products such as grain ('country work'). When country work has arisen, Boral and the haulier have always negotiated rates for each particular job. Up until about three years ago, it was not uncommon for Boral to pay a living away from home allowance for hauliers undertaking country work. However, at the request of the hauliers, this allowance was rolled into the cartage rate. At the time, the hauliers indicated that rolling the allowance into the cartage rate would provide them with taxation advantages..." I note that Clause 9, Country Work and Other Work, of the new Boral Contract Determination provides: "A haulier shall perform country or other work as directed by Boral for previously negotiated rates which must include an allowance for travelling and living away from home." 17 I regard this TWU claim as a rather unremarkable one. I would expect that any Boral haulier whose particular work required him to travel overnight would, as a matter of course, be entitled to expect compensation for all reasonable and actual expenses he incurs by the principal that sends him for such work - and Clause 9 appears to contemplate such compensation. However, Mr Ward has opposed this claim and sees no reason to insert it in the new Boral Contract Determination. He argues that there is no evidence before me from Mr Olsen to support a claim that the Boral hauliers were being disadvantaged by the existing arrangements under which the hauliers negotiate rates for each job of "country work" (in accordance with Clause 9). Mr Harris believes that the proposed arrangements for the hauliers to receive reasonable and actual expenses for overnight travel may, in fact, operate against their interests in that respect and it is his understanding that they would prefer the existing arrangements where the travelling expenses are factored into the remuneration for each job, receiving certain taxation advantages from such a course of action. The Down Time for the Repair of Trailers 18 Clause 5, Trailer, of the new Boral Contract Determination provides as follows: "(1) Boral shall supply a haulier with a trailer, which shall be suitable for the cartage work. (2) Subject to Clause 5.3, Boral shall at its expense register any trailer and maintain it in a safe and roadworthy condition at all times. (3) A haulier shall at its expense provide: (a) safe and roadworthy tyres; and (b) any replacement load cover if the replacement is required through the negligence of the haulier. (4) Boral and a haulier shall use their best endeavours to schedule trailer maintenance at a time that is least disruptive to the performance of the cartage work such as when a haulier is undertaking scheduled repairs or maintenance on their prime mover." 19 Most repairs for trailers for the Boral metropolitan fleet occur at the depot at the Emu Plains quarry but some repairs are carried out at other locations. For the south coast hauliers, in the past minor repairs to the trailers were conducted at the Boral Port Kembla depot but with its closure those repairs are to be conducted by a sub-contractor at a service centre in Unanderra - relatively close to the Port Kembla depot site but 25 kilometres from the new Boral yard at Dunmore. 20 For major repairs, the south coast haulier was required to transport the trailer to the Emu Plains quarry depot or to a sub-contractor in Fairy Meadow. If the repairs were such that the trailer was to be off the road for any significant period of time, the haulier would either be supplied with a replacement trailer or take a period of planned leave. Mr Harris records in his written statement that: "...as there are much fewer hauliers in the south coast fleet than the metropolitan fleet, the south coast hauliers have a much better chance of being provided with a replacement trailer when needed. In the south coast fleet the one replacement trailer is shared between 6 hauliers whereas in the metropolitan fleet the one replacement trailer is shared between 33 hauliers..." 21 Mr Olsen seeks payment to the south coast hauliers for travel time - one hour - on those occasions where a trailer is not available to the contract carrier for more than one day for up to two separate occasions in each calendar year. He also seeks that Boral pay the haulier at an hourly rate of $66.00 per hour or part thereof, up to a maximum of 8 hours per day, whilst the trailer remains unavailable due to maintenance or repairs. 22 Mr Ward described that claim as in the nature of demurrage. He sees no justification for this claim. Mr Harris asserts in his written statement that: "...the changes around trailer maintenance and repair that have been introduced by Boral in the lead up to the closure of the Port Kembla depot have made trailer maintenance and repairs more convenient for south coast hauliers - not less convenient. It is my experience that the hauliers take better care of Boral's trailers than employees given that hauliers have a vested interest in ensuring that Boral's trailers are taken care of and properly maintained. If the union's claim for south coast hauliers to be paid remuneration in connection with trailer maintenance and repairs was to succeed, this would create a disincentive for south coast hauliers to look after the Boral trailer that they use. I note that when a haulier is unable to provide Boral with a prime mover, the haulier does not provide any compensation to Boral for failing to make the prime mover available even though this often results in additional cost to Boral..." Conclusion 23 There is no evidence before me to suggest that at any time there was a relationship between the 1998 contract agreement for the Boral hauliers and the Quarried Materials Contract Determination. On the contrary, I regard as persuasive the evidence of Mr Harris that the 1998 contract agreement stood alone and the different rates of remuneration in it were dictated by market forces in the particular regions where the hauliers worked. I am therefore not satisfied that there is any justification for an increase to the rates of remuneration in the new Boral Contract Determination for the south coast hauliers and I reject the TWU claim made on their behalf in these proceedings. 24 Nor am I prepared to grant the TWU claim for payment to be made to the south coast hauliers with respect to times when the Boral trailer is being repaired. As Mr Harris suggested in his evidence, Boral makes no claim against the hauliers when for some reason their prime mover is out of service. As Mr Ward indicated in his submissions, the TWU claim in that respect must be considered in the context of the actual wording of Clause 21, Leave Reserved, of the new Boral Contract Determination - "...when a trailer is unreasonably unavailable to perform the cartage work due to maintenance or repair...". Moreover, there still remains the mutual requirement contained in Clause 5, Trailer, of the new Boral Contract Determination that "...Boral and a haulier shall use their best endeavours to schedule trailer maintenance at a time that is least disruptive to the performance of the cartage work...". 25 However, notwithstanding Mr Ward's assertions in his submissions concerning the lack of evidence to support Mr Olsen's argument for the new Boral Contract Determination to be amended to include a provision for reasonable or actual expenses when a haulier travels, I am satisfied that there is merit in the claim (as modified). I suggest words to the following effect as part of Clause 9, Country Work and Other Work, of the new Boral Contract Determination: "Contract carriers engaged on work which precludes them from reaching their home at night shall be paid either: (a) all reasonable and actual expenses incurred in obtaining accommodation for the night, including an evening meal, bed and breakfast, providing the contract carrier submit to Boral Transport an itemized list with supporting account paid by the contract carrier; or (b) where the contract carrier has an approved sleeper berth an allowance of $40.00 per night shall be paid; or (c) such rate of remuneration which Boral and the haulier agree for the particular work." 26 Whether or not it is actually necessary to insert such a provision in the new Boral Contract Determination is ultimately a matter for the parties. I direct Boral and the TWU into discussions concerning the actual wording of the provision and will reconvene the proceedings to vary the new Boral Contract Determination accordingly upon request. P J CONNOR Commissioner 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.