Industrial Relations Commission of New South Wales CITATION: Transport Workers Union of New South Wales (o-b Alireza Moghaddam) v Corporate Express Supply Chain Pty Ltd [2009] NSWIRComm 1079 APPLICANT Alireza Moghaddam PARTIES: RESPONDENT Corporate Express Supply Chain Pty Ltd FILE NUMBER(S): 564 of 2009 CORAM: Macdonald C CATCHWORDS: Application for a contract determination of reinstatement - transport industry - application pursuant to section 314 of Industrial Relations Act 1996 - contractor engaged by Corporate Express Supply Chain Pty Ltd to deliver office supplies to various customers - contractor questioned by Corporate Express surrounding procedure/paperwork and actual quantity of office supplies taken from Corporate Express premises and delivered to a particular customer - Corporate Express investigation into incident and meetings with contractor - contract between contractor and Corporate Express terminated - application by Union for reinstatement of contract of carriage - Hearing - No allegation of theft - contractor loaded extra boxes of paper for client of Corporate Express - the extra boxes had purpose of making up shortfall in number of boxes that client had been ordering in recent past - CCTV footage viewed by Commission - evidence about shortfall in boxes picked for delivery as against number of boxes ordered by client - method by which one or more drivers make up any shortfall - "common practice" - September 2008 memorandum - drivers motivation for making up shortfall - keep client happy - HELD: Termination of contract harsh - reinstatement of contract ordered - order for part of the contractors lost earnings. LEGISLATION CITED: Industrial Relations Act 1996 Agnew & Ors v Nationwide News Limited AIRC PR 927597 Budlong v NCR Australia Pty Ltd (2006) NSWIRComm 288 CASES CITED: Cherry v Allied Express Transport (1997) 73 IR 305 D and R Commercial Pty Ltd v Flood (2002) 113 IR 344 Outboard World Pty Ltd t/as Budget Waste Control (Sydney) v Muir (1993) 51 IR 167 Transport Industry - Redundancy Contract Determination (2007) NSWIRComm 183 HEARING DATES: 31/08/09; 01/09/09 & 21/09/09 DATE OF JUDGMENT: 23 October 2009 APPLICANT Mr O Fagir, union official Transport Workers Union of New South Wales LEGAL REPRESENTATIVES: RESPONDENT Mr Paul Brown, solicitor Baker & McKenzie, Solicitors DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: MACDONALD C 23 October, 2009 Matter No IRC 564 of 2009 Transport Workers Union of New South Wales (o/b Alireza Moghaddam) v Corporate Express Supply Chain Pty Ltd Application by Transport Workers Union of New South Wales on behalf of its member, Mr Alireza Moghaddam, re unfair dismissal pursuant to section 314 of the Industrial Relations Act 1996 DECISION [2009] NSWIRComm 1079 1 This is an application by the Transport Workers Union of New South Wales ("the Union") on behalf of its member, Mr Alireza Moghaddam for reinstatement of an independent contractor agreement held by RRA Enterprises with Corporate Express Supply Chain Pty Ltd ("Corporate Express"), pursuant to section 314 of the Industrial Relations Act 1996 ("the Act"). 2 The section 314 application was filed on 20 April, 2009. The remedy sought is reinstatement of the contract of carriage between Mr Moghaddam and Corporate Express Supply Chain Pty Ltd. 3 Conciliation was held by myself on 30 April and 4 May, 2009. On the latter date, the file was programmed for a Hearing in July 2009. During my leave, the file was brought on at the request of the parties. That Hearing was vacated by Commissioner Connor on 3 July and a new Hearing program set down. Subsequently the file was returned to myself. 4 The Hearing took place before myself on 31 August, 1 and 21 September, 2009. 5 The Union was represented by Mr O Fagir, union official, who called the following witnesses: Mr Alireza Moghaddam - former contractor/driver Mr Adam Fanning - current contractor/driver Mr Jeff Orford - current contractor/driver 6 The Corporate Express was represented by Mr P Brown, solicitor who was assisted by Ms M Hurley-Smith. The following witnesses were called: Mr Matt Early - Fleet Manager Ms Sarah McLennan - Human Resources Advisor BACKGROUND 7 Mr Moghaddam was engaged as a contractor (driver) by Corporate Express Supply Chain Pty Ltd to deliver office supplies to various customers in a geographical area. One such customer was Novotel, Brighton Beach, Sydney. 8 Corporate Express' business is located in a Sydney suburb and has receiving and despatch areas. The warehouse (despatch) area contains a number of work stations. Simply put, there is a despatch office and a large number of loading bays down a long wall. The various contractors pull up into the bays for loading up their vehicles for the day's run. Their run for the day has already been picked by the Corporate Express' warehouse staff (employees) and is sitting in the bays awaiting loading by the various contractors. On the other side of the long wall (say, 300 metres long) is the storage area for the office supplies and from which is picked each contractor's run for a given day. 9 The type and quantity of goods picked from the office supplies storage area, is determined by the customer's requirements/purchasing order. Customer orders for the next day's delivery run must be received by no later than 4.00pm the day before. 10 The customer orders are processed by the warehouse staff. The picked office supplies are placed on pallets or trolleys which are placed in a loading bay for a particular contract carrier's run. 11 Each morning the various contractors pull their vehicle into a loading bay, that they have been allocated. The drivers begin to arrive on site anytime from 12.30am. It will usually take 1.5 to 3.5 hours to load their van and prepare the paperwork for their run for the day. 12 Each contractor obtains a bundle of invoices from their respective pigeonholes. Each invoice represents a customer's delivery for that day. The invoice will show, for example, how many boxes of paper are to be delivered to a given customer. 13 There can be errors in picking product for delivery to a customer. One type of error is over-pick or under-pick: that is, for example, picking more or picking less than the number of boxes of paper ordered by the customer. 14 If there is an under-pick, the contractor is prohibited from entering the office supplies storage area in order to make up the shortfall. 15 Corporate Express gave evidence as to the procedure to be followed where the contractor notes an over-pick or under-pick and as to how that over-pick or under-pick is to be rectified. 16 On 25 March, 2009, there was an incident concerning the order placed by the customer, Novotel, Brighton Beach. This incident led to the termination of the contract of carriage between Mr Moghaddam and Corporate Express. 17 Mr Moghaddam arrived at his loading bay early in the morning of 25 March. Already waiting for him in that bay was his delivery for that day. The run had been picked by the warehouse staff (employees of Corporate Express) based on the orders placed by the customers of Corporate Express and being the customers serviced by Mr Moghaddam. 18 Mr Moghaddam noticed that the order for Novotel (one of the customers he geographically serviced) was an order for 2 boxes (10 reams) of paper. He said he knew that the order was incorrect (based on experience) and that the order should have been for 10 boxes. Accordingly, he rectified this alleged under-pick by taking several boxes of paper from another carrier's run, from a nearby bay. 19 Mr Moghaddam said it was common practice amongst the contractors to go to the nearest pallet of product to get replacement product when orders are short picked. 20 Mr Moghaddam completed his paperwork and drove off for his day's run. 21 The contractor, from whom Mr Moghaddam had taken product, was then under-picked. This contractor, Mr Bell, raised the shortfall with Mr Early, the Fleet Manager, whose office is the despatch office located amongst the loading bays. This set off a chain of events that included enquiries with Mr Moghaddam; the replay of surveillance footage for that day and the days leading up to 25 March; formal meetings between Corporate Express officers and Mr Moghaddam (with support person); the suspension of Mr Moghaddam's contract of carriage on 31 March; and the termination of Mr Moghaddam's contract of carriage on 2 April, 2009. 22 The termination of service agreement letter of 2 April, 2009 stated two reasons for the termination of Mr Moghaddam's carrier contract: (a) Failure to comply to clause 4.1(d) non-compliance of a reasonable request by Corporate Express; and (b) Failure to comply to Schedule III, with the unauthorised removal of Company property from the worksite. FINAL SUBMISSIONS For the Union 23 Mr O Fagir put the following in final submissions on behalf of Mr Moghaddam: (a) The termination of Mr Moghaddam's carrier contract was unfair given the circumstances of the case. (b) Mr Moghaddam was familiar with Novotel's requirements for boxes of paper, that is, Novotel usually ordered 10 boxes. So, Mr Moghaddam took the view that an error had occurred in the number of boxes picked by the warehouse staff of Corporate Express. There was paperwork to support this view of a picking error. (c) Mr Moghaddam made up the short supply by taking boxes from another run for another contractor that day. He said it was common practice for contractors to do so. (d) Corporate Express does not claim that there was any theft by Mr Moghaddam in his so dealing with these extra boxes of paper. (e) Corporate Express said there was a procedure or policy for under-picks but it was a theoretical policy or procedure. The reality is that the contractors engage in the practice of taking supplies from other bays and this is because of a shortage of dockhand staff to give assistance to the contractors. (f) Even if Corporate Express had such a policy or procedure about under-picks, and Mr Moghaddam was the only contractor who breached that procedure/policy, then that would not constitute a valid ground for terminating the contract. Even if it did constitute a valid ground for termination, then to do so would be a harsh decision by Corporate Express as the punishment does not fit the crime. (g) Mr Moghaddam sought reinstatement of the carriage contract and payment for all lost earnings. There was no dishonesty on his part and he acted in the best interest of Novotel. Failing reinstatement of the contract of carriage being ordered by the Commission, then maximum compensation was sought. For Corporate Express 24 Mr P Brown put the following in final submissions on behalf of Corporate Express: (a) The Union's application should be dismissed. (b) Schedule III to the independent contractor agreement between Mr Moghaddam and Corporate Express deals with the handling of "Company Property". Schedule III also makes reference to contractors conducting their business with integrity and conducting operations in compliance with all applicable laws. Schedule III includes the following commentary: "Company property should not be used, sold, loaded, given away or otherwise disposed of, regardless of conditions of value, except with proper authorisation". (c) Clause 4.1 (d) of the independent contractor agreement, permits Corporate Express to terminate the independent contractor agreement, without notice, in circumstances of misconduct by the contractors. Misconduct includes: (i) material breach of Schedules I to VI inclusive; and (ii) non-compliance of a reasonable request by Corporate Express. (d) The independent contractor agreement was terminated because Mr Moghaddam had removed goods without authorisation from the warehouse and this was a failure to comply with Schedule III. (e) Mr Moghaddam had engaged in a similar practice of unauthorised removal of goods on 17 and 20 March, 2009. The evidence of Mr Early the Fleet Sales Manager, and CCTV footage was relied upon in that regard. (f) Mr Moghaddam was aware of the prohibition of removing stock without appropriate and timely authorisation by Corporate Express. (g) Mr Early had issued a memorandum dated 30 September, 2008 and it included the following statement: "You must ask a dock person to pick goods if you are short - do not pick it yourself." Mr Early deposed he placed a copy of this memorandum in each contractor's pigeon-hole. Mr Early deposed he raised the issue with the contractors of not picking stock without authority and the consequences of doing so. This represented a direction. (h) The direction that a contractor was not permitted to pick stock, included the circumstance where a contractor's run was under-picked. (i) The incident of 25 March, 2009 that led to Mr Moghaddam's termination of his independent contractor's agreement, was not a circumstance where his run was under-picked. His run for that day included 3 boxes of A4 paper whereas the paperwork showed he should have only had 2 boxes. (j) There is no allegation made by Corporate Express that Mr Moghaddam took extra stock from the restricted personnel storage area for the office supplies. The unauthorised removal of goods occurred from the loading bays adjacent to the loading bay allocated to Mr Moghaddam. (k) The surveillance (CCTV) footage and evidence of Mr Early, for the events of 25 March, 2009, indicated that Mr Moghaddam had engaged in a pattern of behaviour, which was both unauthorised and clandestine. (l) The defence of Mr Moghaddam to explain his behaviour of unauthorised removal of goods was rejected. In particular, the order of 25 March, 2009 was not under-picked. On his own evidence there was an extra box of A4 paper when compared to the 2 boxes shown as being ordered on the paperwork. (m) Even if Mr Moghaddam was of the view that his run had been under-picked (by 7 boxes of A4 paper) for his Novotel customer, then he still needed to bring that perceived order error by the warehouse staff, to the attention of a Corporate Express representative. His conduct in correcting a perceived error, had the cascading effect that Mr Bell believed his order had been short-picked. (n) The termination of the independent contract agreement was procedurally fair. (o) The remedy of reinstatement of the contract of determination, sought by the Union, was opposed. If the Commission was to order reinstatement, then it did not follow that maximum compensation for loss of earnings should be ordered by the Commission. One should have regard to the evidence about the financial arrangement of Mr Moghaddam's business. The Commission could also have regard to case law where no compensation was provided even though the court had ordered reinstatement. Union in Reply 25 Mr Fagir replied, inter alia, that Mr Moghaddam had taken another 7 boxes because he knew what Novotel wanted as to the quantity of boxes to be delivered to Novotel (given his knowledge of Novotel's ordering pattern). CONSIDERATION 26 Corporate Express is engaged in the business of the sale, marketing and distribution of stationery and office supplies. It engages drivers (contractors pursuant to an independent contractor agreement) to deliver those stationery and office supplies to customers of Corporate Express. 27 Corporate Express terminated the services of one of its contractors, Mr Alireza Moghaddam who is a director of RRA Enterprises (the Contractor). The termination was pursuant to the independent contractor agreement between Corporate Express and the Contractor. (Ex 5 - ME1 and Ex 10 - SM1) 28 The grounds for termination of the services was set out in a letter dated 2 April, 2009. The letter is authored by Mr Anwar Feghali, NSW Operations Manager. (Ex 1 - AM2) Mr Feghali did not give any evidence in the case. 29 The grounds of termination are twofold: (a) Failure to comply to clause 4.1(d) non-compliance of a reasonable request by Corporate Express; and (b) Failure to comply to Schedule III, with the unauthorised removal of Company property from the worksite. 30 No explanation is provided in this letter for the meaning of these two grounds of the termination of the Contractor's services. The Commission will set out below, based on the evidence, the meaning of these two grounds. The 25 March, 2009 Incident 31 On 25 March 2009, there was an incident concerning the order placed by a customer (Novotel) of Corporate Express. This customer was serviced by Mr Moghaddam. 32 Mr Moghaddam arrived at his loading bay early in the morning of 25 March. Already waiting for him in that bay was his delivery for that day. The run had been picked by the warehouse staff (employees of Corporate Express) based on the orders placed by the customers of Corporate Express and being the customers serviced by Mr Moghaddam. 33 Mr Moghaddam noticed that the order for Novotel (one of the customers he geographically served) was an order for 2 boxes (10 reams) of paper. He said he knew that the order was incorrect (based on experience) and that the order should have been for 10 boxes. Accordingly, he rectified this alleged under-pick by taking several boxes of paper from another carrier's run, from a nearby bay. 34 The carrier (Mr Bell), from whom Mr Moghaddam took the extra boxes of paper, was then short of supplies for his run. He raised this shortfall with Mr Matt Early, the Fleet Manager, whose office is the despatch office located amongst the loading bays. 35 Mr Early raised the missing boxes from Mr Bell's run with the Supervisor Mr Daly who telephoned Mr Moghaddam as to his knowledge of the missing boxes of paper. Mr Daly did not give evidence in the case. Mr Early deposed that Mr Moghaddam said he had taken the boxes (but only 2 boxes) and that he had told Jimmy, one of the warehouse employees. (Ex 5 - para 39) 36 Jimmy San was approached by Mr Early and Mr Daly. Mr Early deposed that Jimmy said he had not spoken to Mr Moghaddam. (Ex 5 - para 40) 37 Mr Early then reviewed the CCTV (surveillance) footage for that day and that week leading up to 25 March. 38 Mr Early spoke to Mr Moghaddam the next day, 26 March. Mr Early deposed that Mr Moghaddam said he took 2 or 3 boxes from Mr Bell's run and that he had not spoken to Jimmy. Further, he had not told Mr Early that he had taken these boxes because he had not seen Mr Early (at work). (Ex 5 para 42) 39 Mr Early received a copy of the CCTV footage on 31 March. He reviewed this footage with Mr Feghali. Mr Early's review of the footage, formed the view that Mr Moghaddam had taken more than 2 boxes of paper from Mr Bell's run. 40 On that same day, 31 March, a meeting was held by personnel of Corporate Express (headed by Mr Anwar Feghali) with Mr Moghaddam (and union witness). The purpose of the meeting is set out in the minutes of that meeting. (Ex 10 - SM3) The purpose was to discuss: (a) the taking of copy paper from someone else's run and (b) the number of boxes taken which was said by Mr Moghaddam to be 2 boxes but later 3 boxes. Corporate Express had information it was more than 3 boxes. At the conclusion of the meeting, the services of RRA Enterprises were suspended. 41 Corporate Express undertook a formal investigation into the incident. To that purpose, the services of Ms Sarah McLennan, Human Resources Advisor, were used. She conducted interviews with various persons on 1 April. 42 Another formal meeting was held with Mr Moghaddam on 1 April and minutes were kept of the meeting. (Ex 10 - SM8) 43 A final meeting was held with Mr Moghaddam on 2 April. No minutes were made of the meeting. Ms McLennan deposed that the purpose of the meeting was to give Mr Moghaddam the opportunity to respond to "the Allegations" and to finalise the written record of the previous meeting of 1 April. The meeting broke up for a couple of hours while the personnel of Corporate Express considered "the Allegations" and Mr Moghaddam's responses. Upon resuming the meeting, Mr Feghali advised that Mr Moghaddam had breached his contract with the result that the independent contractor agreement had been terminated by Corporate Express. Thus, "the Allegations" against Mr Moghaddam had been made out. (Ex 10 - paras 36 to 39) The Allegations 44 Ms McLennan sets out in her witness statement the meaning of "the Allegations" that were made against Mr Moghaddam: (a) taken paper from someone else's run; (b) removed paper from the Erskine Park RDC (regional distribution centre of Corporate Express) without authorisation; (c) provided inconsistent responses to Corporate Express regarding the removal of the paper on 25 March 2009; and (d) failed to comply with a reasonable request by Corporate Express. (Ex 10 - para 17) 45 As to "the Allegations" set out above, paragraphs (a), (b) and (c) pertain to one of the grounds for termination of the independent contractor agreement: Failure to comply to Schedule III, with the unauthorised removal of Company property from the worksite. To paragraph (c) above, can be added the point raised in the final submissions of Corporate Express, that Mr Moghaddam "was less than honest in his responses to Corporate Express representatives in the meeting of 1 April, 2009". As well, to this ground for termination can be added the point raised in the final submissions of Corporate Express, that Mr Moghaddam had engaged in similar conduct of removing goods without authorisation on 17 and 20 March, 2009. 46 Again as to "the Allegations" set out above, paragraph (d) is the second ground for termination - failure to comply with a reasonable request by Corporate Express. This went to a memorandum issued by Mr Early who deposed he had issued a memorandum in September, 2008 advising drivers not to pick stock themselves if an order was short. He also deposed he said to the drivers around that time (at one of the meetings he regularly has with the drivers), that the drivers were not to pick stock if they were short in their runs. (Ex. 5 - paras 32 and 33) 47 As previously advised, the termination letter did not explain the meaning of the two grounds for termination. The Commission has set out above the meaning of those two grounds. The Commission will now consider the evidence surrounding those grounds in the context as to whether the termination of the contract of service between the contractor and Corporate Express, was unfair. The First Ground for Termination 48 The Commission then, turns to the first ground for termination: failure to comply to Schedule III with the unauthorised removal of Company property from the worksite. The meaning of this ground is set out in paragraph 44 and 45 above. 49 Corporate Express relies upon the main incident of 25 March and the other incidents of 17 and 20 March, 2009 to support this ground. 17 March Incident 50 Corporate Express relied upon CCTV footage of 17 March to say there was a pattern of behaviour by Mr Moghaddam, consistent with the incident of 25 March - that is, removal of goods without authorisation. It was claimed that he was observed by the footage taking a box of paper from the pallet of Mr Bell from the adjoining bay. 51 Mr Moghaddam agrees he took the one box. However, he stated that the footage shows him throwing his hands up in the air "as if there is no use waiting for someone to help. The gesture is indicative of the way I often used to feel when I wanted to get out and start working". (Ex 2 - para 12) 52 The Commission is unable to draw any finding on this issue, for lack of evidence from Corporate Express. It may be the case that he approached a staff person about a one box shortfall but this was not captured by the CCTV. It may be the case that he was seeking staff but none could be found because the staff were tied up on other work or were on their break - as evidenced by Fanning and/or Orford. Hence, he is seen to be throwing his arms up in the air, as if in frustration as he says. There is a lack of evidence to draw any finding against Mr Moghaddam . 20 March Incident 53 Similarly as for the 17 March incident, Corporate Express relies upon CCTV footage to claim a pattern of behaviour about the taking of boxes. The footage shows Mr Moghaddam using his pallet - forklift to load 2 boxes from the adjacent driver's run (Rudy) and load those boxes into his own van. A few minutes later, Rudy arrives at his loading bay. Mr Early then deposed that Rudy may be seen checking his pallet of stock. A few minutes later, Rudy and Terry Daly are in conversation around Rudy's pallet of stock. Mr Early deposed that "the conversation appears to be about the missing A4 paper because the footage shows Rudy indicating to Mr Daly the area of the pallet where the paper was taken". Mr Early also deposed that the footage does not show Mr Moghaddam seeking permission to take the paper from Rudy's run. (Ex 5 - para 54) 54 Under cross-examination, Mr Moghaddam agreed that the CCTV footage shows that he took the two boxes. He stated that there are sometimes mix-ups between runs and he took the two boxes that had been wrongly allocated to Rudy and should have been allocated to himself. He could not remember if he spoke to Rudy about these two boxes, but also said why should he tell Rudy if the paper belongs to himself. (Tr 01/09/09 - p30, line 50 to p35, line 43) 55 The Commission notes that the CCTV footage has no sound and accordingly no conversations (as between Rudy and Terry Daly) can be heard. Mr Early entirely relies upon the gesture of Rudy to then infer as to the content of the conversation. The Commission can not accept this inference. There is no way of telling as to what their conversation is about. The Commission notes that neither Rudy or Terry Daly were called as witnesses. Mr Early also gave evidence that there are occasionally mix-ups in product allocations (as stated by Mr Moghaddam). (Tr 01/09/09 - p95, line 45 to p100, line 4) 56 The Commission also notes that this incident of 20 March and 17 March appear to be matters not raised with Mr Moghaddam during the investigatory process. The termination of service agreement letter of 2 April, 2009 refers only to the 25 March incident. It then seems that in raising these two other incidents, then Corporate Express has let some considerable time run before raising these two incidents. It is then understandable for Mr Moghaddam to say in defence that he can not remember. 57 Accordingly, the Commission can not place any weight on these two incidents because of the passage of time and the lack of evidence from Corporate Express to support these two incidents. 25 March Incident 58 As to the main incident of 25 March, 2009, there is no dispute that Mr Moghaddam helped himself to an additional seven boxes of A4 paper from the adjacent bay run belonging to Mr Bell. He did not advise any of the appropriate personnel of Corporate Express that he had done so - that is, he did so without authorisation as claimed by Corporate Express. 59 His defence to the taking of the boxes was twofold: (a) the 3 boxes allocated to his run for delivery to Novotel was in error - it should have been 10 boxes; and (b) it was common practice for drivers to take boxes from a nearby run to make up for a shortfall. 60 As to the taking of the additional seven boxes, he gave as his evidence, his knowledge as to his customer's needs. Novotel was a client of Corporate Express that he serviced and he knew their requirement for 10 boxes. There was documentary evidence to support this defence. 61 The witness statement of Sarah McLennan, Human Resources Advisor, has an annexure which sets out the quantity of A4 paper ordered by Novotel. (Ex 10 - SM10) Initially the quantity was displayed as reams of A4 paper ordered but in December, 2008, Corporate Express changed the quantity criterion, to be ordered by a client, to that of boxes. 62 From 16/12/08 to 30/03/09, there are twelve orders of boxes listed in the following sequence: 10, 10, 5, 10, 3, 7, 10, 10, 10, 10, 2 and 10. 63 The 3 and 7 box orders were ordered one day apart. It was Mr Moghaddam's evidence that the 3 boxes ordered was an example of an error by Corporate Express. This error was rectified the next day by an order of 7 boxes - thus, in reality an order of 10 boxes for that period of time. 64 The 2 box order is for 24/03/09. This is the order of 2 boxes said by Corporate Express to have been ordered by its customer Novotel. However, according to that order scenario, there was an error in that the staff of Corporate Express picked 3 boxes and placed 3 boxes for Mr Moghaddam's delivery to Novotel on 25 March. 65 In reviewing that documentary evidence, it is clear that there is a pattern of ordering of A4 boxes by Novotel from 16/12/08 to the week before the incident for which Mr Moghaddam had his contract terminated. There are, in reality, 9 orders and 8 of which are for 10 lots of A4 boxes. (One of these 8 orders is the 3 and 7 boxes order combined as one order of 10 boxes). The week after the 25 March incident, Novotel placed an order for 10 boxes. 66 Irrespective of that pattern, Corporate Express submitted that the order of 2 boxes placed by Novotel on 24 March for delivery on 25 March was the correct order. The quantity of 2 boxes is the quantity shown on the Novotel Invoice dated 24 March, 2009 (Ex 5 - ME6) and hence is the quantity that should have been delivered by the contractor. 67 The Union countered that the Novotel Order form did show a quantity of 10 boxes. (Ex 6) Corporate Express countered that the "A4 paper" order for "10.00" boxes was a handwritten notation and this raised the issue as to who was the author of this handwritten notation. The Union submitted that there was also a handwritten notation for an order of "Rubber bands" and a quantity of "6.00". The Union pointed out that this item and specific quantity is shown in the Novotel Invoice. (Ex 5 - ME6) Thus, the Union said there was a correct correlation between the Invoice and the handwritten notation on the Novotel Order form for rubber bands. The Union therefore submitted that there was a correct correlation between the Novotel Invoice and the Novotel Order form for the ten A4 boxes of paper. 68 The Commission rejects this submission of the Union, based around exhibit 6. The Commission does not know who added the handwritten notation to exhibit 6. Just because there is a correlation between the handwritten notations as to the rubber bands and boxes and the delivery/quantity of the same, does not establish who added the handwritten notations. 69 Finally, on this issue of the 10 boxes for the 25 March incident, the Commission records that in final submissions, Mr Brown for Corporate Express, stated that his client was not putting that Mr Moghaddam had engaged in theft of those additional seven boxes which he took from Mr Bell's run. 70 The other defence raised by Mr Moghaddam, was that it was common practice for drivers to take boxes from a nearby run to make up for a shortfall in the picking of orders placed by customers. 71 Two other drivers gave evidence in the proceedings: Adam Fanning and Jeff Orford. 72 Mr Fanning deposed that he is currently a contractor but had been the fleet manager for Corporate Express. His affidavit spoke of his approach when he found that the Corporate Express staff had left him short of A4 boxes. Thus, he will inform the staff so that the staff will get the requisite extra boxes. If he cannot find any dock staff, then he will get the extra boxes from the paper stack which is close to where he loads. He then said that he has "on occasion, grabbed paper (boxes) from other pallets in other bays. This is common practice amongst the drivers". (Ex 3 - paras 15 to 16) 73 Mr Brown challenged Mr Fanning's claim that it was common practice for drivers to take paper from other pallets belonging to other drivers' runs. Mr Fanning rejected the challenge and said it was common practice. (Tr 31/08/09 - p 56, line 40 to 44) 74 Mr Fanning previously occupied the position held by Mr Early (fleet manager). Mr Fanning gave an explanation as to the taking of boxes from other drivers' runs. Thus, Corporate Express are short of the staff who service the drivers. A driver can find their run to be short of a product and this is raised with the staff. But the driver's enquiry about shortfall is not the only enquiry occupying the staff. The driver's enquiry is sitting in a queue and there are some 50 odd drivers to be serviced. The driver's enquiry can be forgotten about. (Tr 31/08/09 - p57, line 40 to 48) 75 Elsewhere he gave evidence about this service issue from Corporate Express staff and its impact on the drivers. Thus, "sometimes", there may be no staff on the dock for half an hour to 45 minutes because they are busy elsewhere or on their break. "So in that time, you know, you could have been already loaded and on your way out of the dock". (Tr 31/08/09 - p.55, line 42 to p56, line 7) 76 And further he said, "time is of the essence for our job, to be honest, and waiting half an hour is just not acceptable for any of the drivers on the fleet, … Because waiting that half an hour, you're not loading anything onto your truck. So taking it from another run is - it's happened for all the years that I've been there". (Tr 31/08/09 - p58, line 9 to 21) 77 The other driver who gave evidence was Jeff Orford. He deposed on this issue that "drivers seek to rectify discrepancies (shortfall in stock required for a driver's run) either by asking dock staff to pick more stock or sometimes by taking stock from other runs". (Ex 4 - para 4) Further, "It is quicker to just get the paper from another pile of another driver who has not yet arrived than to wait for dock staff to pick stock". (para 5) 78 In cross-examination from Mr Brown, Mr Orford was taken to a statement he made during an investigatory interview of Mr Moghaddam and for which interview, Mr Orford was a witness. He concurred that he had said during that interview: "No, I don't do it, I'm not aware it's a common practice, I only deliver what's on the manifest". (Tr 31/08/09 - p64, line 5 to 9) 79 At first sight, there seems to be a contradiction between what Mr Orford deposed and what he said under cross-examination - because of the use of the term, "common practice". The apparent contradiction was not cleared up by Mr Brown in cross-examination. 80 The Commission turned to the record of interview from whence Mr Orford used that terminology - the meeting of Wednesday, 1 April, 2009: 11.00am. (Ex 10 - SM8) The contractor (Mr Moghaddam) was being questioned by Mr Anwar Feghali (NSW Operations Manager) about the 25 March incident. On the second last page of the interview, he speaks of a practice that he says he has only carried out twice. The practice occurred where he was short of A4 boxes for delivery to a particular client of Corporate Express. Mr Moghaddam made up the shortfall by taking 8 boxes out of the St George Hospital delivery for that day. Mr Feghali then asked him if he had done this before and he responded one other time. Mr Feghali then asked Mr Orford the following: "Jeff is this common practice?" Mr Orford responded as already recorded above: "I don't do it, I'm not aware it is a common practice…." 81 The Commission's understanding of the foregoing, is that Mr Feghali's use of the term, "common practice", is a reference to a practice of where a driver borrows boxes from a particular client from his/her own run on a certain day in order to make up for a shortfall for another client serviced on that same certain day by that driver. Mr Moghaddam's use of the term, "common practice", was a reference to a different practice, that is, where a driver makes up for a shortfall by taking boxes from another driver's run. 82 The Commission then understands Mr Orford's evidence to be referring to the practice of borrowing from your own run to make up a shortfall, when he said that he did not carry out that practice and that he was not aware of that practice as being a "common practice". 83 Accordingly, Mr Orford's evidence is not contradictory and his evidence is that drivers will take boxes from other runs. The Commission is comforted in that view by the later evidence of Mr Orford given under cross-examination. Thus, he gave evidence that "..I've taken some boxes from another run". (Tr 31/08/09 - p 66, line 19 to 21) And later he agreed it would be inconvenient to take from another driver's run without telling anyone you had done so. He said that that other driver would then be telling the dock staff his run was short of boxes for his run. He agreed that that had a cascading effect but added: "And that's how it's (taking boxes from another run) always done". (Tr 31/08/09 - p67, line 21 to 35) 84 In summary of this "common practice" defence of Mr Moghaddam , there is evidence of two other drivers giving support to this defence that there were drivers who took boxes from other drivers' runs when their own run was short on boxes. 85 However, that finding by the Commission needs to be tempered by another issue: did these two drivers (Fanning and Orford) help themselves from other drivers' runs and say nothing about it or did they inform (somehow) Corporate Express personnel of their conduct? Thus, one of the issues relied upon by Corporate Express for severing the carrier contract, was that Mr Moghaddam helped himself to boxes to another driver's run and told no Corporate Express personnel (no authorisation). This issue also raised another matter of concern for Corporate Express and that went to the honesty of his responses to the investigatory process. 86 On 25 March, Mr Moghaddam took 7 boxes from the run of Mr Bell. He drove out of the warehouse around 5.30am and about two hours later he received a telephone call from a staff person, Mr Terry Daly who enquired if he had taken extra boxes that day. He deposed he responded. "I don't know 2, maybe 3, I'm not sure". He also deposed he told one of the new staff as to taking the extra boxes. (Ex 1 - para 14) 87 Terry Daly did not give evidence in the proceedings. Mr Early deposed that he was present during this phone conversation and that Daly relayed the conversation to him. The name of "Jimmy" was relayed to Mr Early as the staff person whom Mr Moghaddam said he advised as to the taking of the 7 boxes. Mr Early deposed he spoke to "Jimmy" who said he had not spoken to Mr Moghaddam that morning of the 25th. (Ex 5 - para 40) 88 Mr Early deposed he then put this "Jimmy" response to Mr Moghaddam who replied, "I couldn't find anyone on the dock to ask". (Ex 5 - para 42) His right of reply does not dispute this aspect of Mr Early's affidavit. 89 The cross-examination of Mr Moghaddam then proceeded on the basis as to why he had not informed any of the staff. Reference was made to the CCTV footage of 25 March which showed him and Corporate Express personnel nearby to each other (about 5 metres apart). His response was to say, "If I had the presence in my mind", then he would have noticed the personnel. (Tr 01/09/09 - p21, line 13 to 31) Later, he gave evidence that he went into the despatch office to notify the staff of the taking of the seven boxes but no one was present in the office. (Tr 01/09/09 - p22, line 21 to 36) (The Commission can confirm that the CCTV footage shows him entering the despatch office not long after Mr Early leaves his despatch office). 90 Mr Brown then questioned Mr Moghaddam as to why he had not informed Mr Bell, himself, as to the taking of the seven boxes from his run. The CCTV footage showed him walking past Mr Bell. He gave a blunt "No", that he would not have told Mr Bell that he had taken his boxes if he had seen Mr Bell. When asked why not, he responded, "Because this is not the process, the process is basically just take the goods…" (Tr 31/08/09 - p78, line 40 to 48) The next day in the witness box, he was cross-examined again on this issue of not advising Mr Bell that he had taken his boxes and the inconvenience he had caused Mr Bell. Mr Moghaddam's answer did not address this inconvenience factor and that Mr Bell was in close proximity to him that morning. (Tr 01/09/09 - p24, line 14 to 21) 91 The Commission now turns to the practice of Mr Fanning and Mr Orford as to informing staff that they have helped themselves to boxes from another driver's run - before commenting on Mr Moghaddam's circumstances set out above. 92 Mr Fanning's evidence, despite being challenged on the point, was that it was common practice for drivers to take boxes from other drivers' runs. From his evidence in cross-examination, he advised that he alerted Corporate Express personnel to that taking. Or he would "call somebody to let them know" he has taken the boxes because no personnel were around to advise. (Tr 31/08/09 - p55, line 42 to p56, line 7) This suggests, in the context of his answer that he would telephone someone after he has set out on his delivery run. This suggestion is supported by his confirmation that there could be an occasion of urgency whereby he would take the boxes from another driver's run and get on the road. A few answers later, he said "or I'll ring up" as opposed to finding somebody. 93 Mr Orford was not questioned on what procedure he adopted for informing staff that he had taken boxes from other drivers' runs. As already recorded above, he confirmed the practice of taking boxes and, whilst acknowledging the inconvenience to the effected drivers whose runs are then short, he said, "And that's how it's always done". 94 The Commission will now comment on this "common practice" defence of Mr Moghaddam and of his not advising the staff or Mr Bell about this 25 March incident. 95 Two drivers, Fanning and Orford, lent weight to Mr Moghaddam's defence of common practice in making up for a shortfall of boxes in one's own run, by taking boxes from other drivers' runs. As such, the common practice of Mr Moghaddam is not peculiar to himself. 96 Mr Moghaddam said initially he had informed one of the new guys, maybe Jimmy about taking boxes, but seems to have changed his evidence in that regard when speaking with Mr Early, on the following day (26 March). 97 He had not informed staff who were nearby to him on 25 March because they were not present in his mind - even though he may have seen them. He said he went into the despatch office, around that time to inform staff that he had taken extra boxes - but no one was there. 98 The Commission had the benefit of observing Mr Moghaddam in the witness box over a three day period and assessing his responses and manner of responses over that time. The Commission found Mr Moghaddam to be evasive and non-responsive when questioned about the events of 25 March, 2009 - particularly as to whom he claimed to have told (if anyone) about the taking of the extra boxes by himself. The Commission finds that he did not tell anyone. Further, the Commission does not accept that he went into the despatch office for the purpose of advising staff he had taken the extra boxes. 99 The Commission finds that Novotel, Brighton Beach ordered 2 boxes of paper for delivery on 25 March, 2009 and that Corporate Express staff erred in dealing with that order by picking 3 boxes of paper (instead of 2 boxes) for delivery to Novotel, Brighton Beach. Mr Moghaddam by his own admission made up the shortfall to the pattern of ordering 10 boxes made by Novotel. 100 The Commission finds on the evidence (oral and documentary) that Novotel, Brighton Beach had a pattern of ordering 10 boxes and Novotel was a client regularly serviced by Mr Moghaddam. He therefore had knowledge as to this pattern of ordering 10 boxes by Novotel. 101 The Commission finds that he made up the shortfall in boxes by taking boxes from Mr Bell's delivery run. Mr Moghaddam relied upon the defence of "common practice" - that is, there was a common practice by drivers to take boxes from other drivers' runs in order to make up a shortfall. There was evidence from two other drivers giving support (to one degree or another) to this "common practice" defence. The Commission finds that the motivation for doing so, was driven by the drivers' need to load the van up - drive out of the warehouse as soon as possible - and service the clients of Corporate Express: that is, keep the clients happy. 102 On balance, the Commission finds that Mr Moghaddam took the extra boxes of paper to make up the shortfall in Novotel's usual order pattern of ten boxes. There was evidence from two other drivers giving support (to one degree or another) to this "common practice". It was reasonable for Mr Moghaddam to act in the manner he did given his knowledge of the ordering pattern of Novotel, Brighton Beach. He was motivated to keep this client of Corporate Express, happy with the service. 103 Mr Moghaddam acknowledged that he walked past Mr Bell and would not have said anything to Mr Bell if he had noticed him. The Commission was not impressed by this response which was, at best, indifferent to the inconvenience he could have caused Mr Bell. Would he like it, if the shoe was on the other foot? The Second Ground for Termination 104 The second ground for termination of the service agreement is: failed to comply with a reasonable request by Corporate Express. This went to a memorandum issued by Mr Early who deposed he had issued a memorandum in September, 2008 advising drivers not to pick stock themselves if an order was short. He also deposed he said to the drivers around that time (at one of the meetings he regularly has with the drivers), that the drivers were not to pick stock if they were short in their runs. (Ex 5 - paras 32 and 33) 105 The memorandum issued on 30 September, 2008 was as follows: "Drivers Please make sure you are not picking stock when an order is short - eg taking paper from the floor stacks. You must ask a dock person to pick goods if you are short - do not pick it yourself". (Ex 5 - ME3) 106 The Commission notes that the memorandum specifically states not to pick stock and cites one area, that is, the floor stacks. This is not the same area as the drivers' bays. 107 Mr Early, the Fleet Manager, gave evidence that he was unaware of any Corporate Express document that advised of termination of a driver's service agreement if he/she took stock from another driver's bay. He also stated that any oral representation to drivers about taking stock from another driver's bay, would not have used the word, "terminated", but instead, "disciplinary action". (Tr 01/09/09 - p99, line 12 to 20) 108 Mr Fanning was questioned in cross-examination about this memorandum's existence. He could not say that he had seen the memorandum but was aware of its subject matter - the prohibition of taking stock from the floor stacks. He advised that the floor stack is where the paper (boxes) gets stored. He was not questioned as to the application of the memorandum to the taking of boxes from other drivers' bays. 109 Mr Orford was questioned in cross-examination about this memorandum's existence. He said he had not seen the memorandum. He stated he would not pick stock from the floor stock but that prohibition "is different to picking paper outside or in someone's bay". (Tr 31/08/09 - p66, line 35 to p67, line 4) Mr Orford was not challenged in this distinction of his as to the application of the memorandum to drivers' bays. 110 The Commission has already canvassed the evidence going to the practice of taking stock from another driver's run - despite the applicability or otherwise of the September memorandum. The evidence of Mr Moghaddam, Mr Fanning and Mr Orford is that there is a practice (however common) of making up for a shortfall from another driver's run. The motive for doing so is to load the van up with the daily run, get out of the warehouse as soon as possible and begin servicing the clientele of Corporate Express. This motivation can otherwise be described as keeping the customer satisfied. 111 As to this second ground for the termination of the service agreement, the Commission finds that it is not a reliable ground for doing so. Thus, there is the question of the applicability of the memorandum in the first place to the taking of stock from drivers' bays area. Secondly, although Mr Early's evidence is that the memorandum can be used for disciplinary action, it seems to the Commission that to apply it as a ground for termination against Mr Moghaddam, in the face of other drivers (how many?) carrying out the same conduct, is not a fair administration of disciplinary procedures by Corporate Express. CONCLUSION 112 The Commission has before it, an application for the reinstatement of the contract of carriage of RRA Enterprises, on the ground that there was no valid reason for the termination of the independent contractor agreement. The application was made pursuant to section 314 of the Act. In the alternate, the Union sought compensation. 113 Corporate Express opposed that application as to both remedies. 114 The Commission has considered the two grounds relied upon in the termination letter of 2 April, 2009, for ending the independent contractor agreement with RRA Enterprises. The Commission noted that the two grounds for the termination were not self explanatory and the Commission waded through the evidence to seek the full explanation for those grounds - especially for the first ground. 115 The first ground comprised a few elements and applied to the main incident of 25 March and the supplementary incidents of 17 and 20 March. The Commission rejected the 17 and 20 March incidents as reasons for supporting the termination - for primarily the lack of evidence by Corporate Express to support these two incidents. 116 The Commission considered at length the circumstances surrounding the main incident of 25 March. This was the incident referred to in the termination letter. The Commission set out its findings, in paragraphs 98 to 102 above, about the case against Mr Moghaddam. In particular, the Commission found that he had taken the extra boxes of paper to make up the shortfall in Novotel's usual order pattern of 10 boxes. He did so based on his knowledge of the number of boxes ordering pattern of Novotel. He was motivated in his action to keep the client happy. 117 For the reasons set out in this Decision, the Commission finds that the termination of the independent contractor agreement between RRA Enterprises and Corporate Express was harsh: Outboard World Trade Pty Ltd t/as Budget Waste Control (Sydney) v Muir (1993) 51 IR 167 at 183. 118 The termination was harsh because there was only a one-off incident (25 March) and not three incidents as claimed by Corporate Express. The one-off incident did not involve any allegation of theft of property. Mr Moghaddam had engaged in a practice and he was not the only one to do so. He had not breached any policy on the subject matter of the September, 2008 memorandum. 119 The Commission has determined to reinstate the contract of carriage between RRA Enterprises and Corporate Express Supply Chain Pty Ltd. 120 The Commission was addressed by the parties as to the quantum of lost earnings that should be ordered in the event that the Commission had to determine this issue. The Commission has then had regard to section 314(3) of the Act, the information as to earnings made by Mr Moghaddam as provided by Ms Sarah McLennan (Ex 10 - SM11), the parties final submissions (including case law) and to the overall evidence and findings of the Commission, in determining the order as to the quantum for lost earnings. The parties were in agreement that the maximum amount of lost earnings that could be awarded was $63,888.00. The Commission then calculated the average weekly earnings to be $2,457.23. The Commission also notes that the awarding of compensation is not the outcome of a mathematical formula: D and R Commercial Pty Ltd v Flood (2002) 113 IR 344. ORDERS The Commission hereby makes the following Orders: (a) The independent contractor agreement between RRA Enterprises and Corporate Express Supply Chain Pty Ltd is reinstated. (b) Corporate Express Supply Chain Pty Ltd is to treat twelve (12) weeks after the period of termination as a period of engagement, pursuant to section 314(3). (c) Corporate Express Supply Chain Pty Ltd is to pay RRA Enterprises the amount of $29,486.76 ($2,457.23 x 12 weeks). (d) The foregoing Orders shall take effect within twenty-one (21) days from the date of this Decision. A Macdonald 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.