Industrial Relations Commission New South Wales Medium Neutral Citation: TWU v Holcim (Australia) Pty Ltd [2011] NSWIRComm 1037 Hearing dates: 7-8 April 2011 Decision date: 18 July 2011 Jurisdiction: Industrial Relations Commission Before: Macdonald C Decision: The Readymix Holdings Pty Ltd Concrete Cartage Contract Determination does not allow the respondent to require a carrier to accept the offer of a company owned truck whilst the carrier's truck is off the road being repainted at the direction of the company. Catchwords: INDUSTRIAL DISPUTE - section 130 - union claim for demurrage payment pursuant to industrial instrument - demurrage payment is a form of compensation - industrial instrument contains clause providing that company can direct contract carriers to repaint their vehicles - repainting requires vehicles to be off the road for repainting - if repainting takes longer than 7 days, company pays demurrage to carrier - company offered loan of company owned vehicle whilst carrier's truck being repainted - driver rejected offer and claimed demurrage payment as repainting took longer than 7 days - interpretation of repainting clause and industrial instrument - company could not require carrier to accept offer of company owned vehicle whilst repainting of his vehicle occurred - driver entitled to payment of demurrage Legislation Cited: Industrial Relations Act 1996 Cases Cited: Kingmill Australia Pty Ltd t/as Thrifty Car Rental v Federated Clerks Union of Australia, New South Wales Branch (2001) 106 IR 217 Category: Principal judgment Parties: Transport Workers Union of New South Wales (Applicant) Holcim (Australia) Pty Ltd (Respondent) Representation: Ms E Larbalestier and Mr J Maslem (Applicant) Mr M Diamond and Mr S Buchanan (Respondent) File Number(s): IRC 1273 of 2010 DECISION 1This decision concerns a dispute notification by the Transport Workers Union of New South Wales ("the union") of a dispute with Holcim (Australia) Pty Ltd ("the company"), pursuant to section 332 of the Industrial Relations Act 1996 ("the Act"). 2The dispute notification was lodged on 12 November, 2010 and concerns the application of Clause 23 of the Readymix Holdings Pty Ltd Concrete Cartage Contract Determination ("the Readymix Determination"). 3The question, dispute or difficulty before the Industrial Relations Commission of New South Wales ("the Commission"), is whether or not contract carriers are eligible to be paid demurrage (whilst their trucks are off the road being repainted at the direction of the company) and in the circumstance where the drivers reject the loan of a company truck to perform work. 4Initial listings of the dispute notification were vacated. A compulsory conference was held on 3 December, 2010 and a report back held on 17 December. On that latter date, the dispute notification was programmed for a Hearing. The dispute notification was listed for mention on 4 and 14 March, 2011. On 18 January 2011, the union wrote to the company advising that the union would be making a small claim application under section 380 of the Act . 5The Hearing took place on 7 and 8 April, 2011. 6At the hearing, the union was represented by Ms E Larbalestier, union official and who was assisted by Mr J Maslem, contract carrier. 7The union filed witness statements for: John Maslem - contract carrier Ian Dodd - contract carrier Laurie Crouch - contract carrier None of the union called witnesses were required for cross-examination. 8At the Hearing, the company was represented by Mr M Diamond of Workplace Advisory Group and who was assisted by Mr S Buchanan, Operations Manager of the company. Mr Diamond called the following witnesses for cross-examination: Danny Miles - Sydney Concrete Transport Co-ordinator Scott Wiseman - Production Manager 9Arising out of the Hearing, the Commission requested to be addressed on certain issues and the parties responded with written submissions. The union filed its written submission on 29 April and the company filed on 11 May 2011. BACKGROUND 10The company engages 124 contract carriers across Sydney, Newcastle and Wollongong to provide concrete cartage services. The company also uses 18 company owned vehicles in those areas to supplement the contract for fleet arrangements. 11The company's relationship to the contract carriers is that of principal contractor. The carriers are owner drivers. 12The company took over the operation of providing concrete cartage services from Cemex Australia Pty Ltd which took over the operation from Rinker Australia Pty Ltd which took over the operation from Readymix Holdings Pty Ltd. 13The Readymix Determination contains a provision for the repainting of a carrier's truck: "Clause 23. Painting and Sign Writing" - see, in particular, Clause 23.4 Repainting. 14Clause 23.4 concerns the repainting of a carrier's truck into the colours stipulated by the company. Thus, for example, a carrier's truck painted in the colours of the former principal contractor, Cemex Australia Pty Ltd, is repainted into the colours of the company (the current principal contractor). The carrier makes their truck available for repainting at the reasonable request of the company. That request initially requires the carrier to prepare the truck for repainting by having the chassis of the truck sandblasted. (The carrier pays the cost of the sandblasting). The truck is then supplied to the company for repainting, which cost is paid for by the company. Clause 23.4 then states that if the repainting is not completed within seven (7) calendar days, then the carrier shall be paid demurrage for each additional day that the truck is not available for work to its owner-driver. 15The issue before the Commission, is the circumstance by which demurrage is paid to a carrier. 16The company submitted that if the company offered the carrier the use of a company owned truck, whilst the carrier's truck was being repainted and the carrier rejected that offer , then the demurrage provision did not apply. If the company made no offer of the loan of a truck, then the demurrage provision applied if the repainting of the carrier's truck went beyond seven (7) calendar days. 17The union submitted that Clause 23.4 provides that the company can request for a carrier's truck to be repainted. That request results in the carrier's truck not being available for earning revenue for the carrier. Accordingly, Clause 23.4 provides for the payment of demurrage to the carrier if the repainting extends beyond seven days. The demurrage then is a form of compensation. Clause 23.4 does not contain any provision requiring a carrier to take up the offer of the loan of a company owned truck, whilst the carrier's truck is being repainted. 18A dispute as to the operation of Clause 23.4 had previously been before the Commission (Macdonald C) under a different matter number and involving the same parties: IRC 1094/10. The circumstances surrounding that dispute are set out in the witness statement of Danny Miles (Ex 7). The dispute concerned two contract carriers. That matter was settled arising out of a compulsory conference before myself on 26 October, 2010. 19Subsequently, the company issued a memorandum on 3 November, 2010, per Mr Scott Buchanan, Operations Manager (Ex 6 - DM1). The memorandum referred to the recent settlement and advised of how the repainting provision would apply in the future. The memorandum, in part, referred to the offer of the use of a company truck when the carrier's truck is off the road, being repainted - and unless the carrier has an excellent reason to the contrary, then it will be expected that the carrier will accept the offer of the company truck. If the carrier declined (without excellent reason) then demurrage will not be paid for repainting beyond seven days. The carrier would also be deemed to be unavailable for work. FINAL SUBMISSIONS 20The union provided a written final submission during the second day of the hearing. Ms Larbalestier spoke to that document, which the Commission summarises as follows: (a) The dispute notification was filed on behalf of the union member, John Maslen, contract carrier, whose terms of engagement are governed by the Readymix Determination. (b) The dispute arose over the company not paying demurrage to John Maslen whilst his truck was being repainted per the direction of the company. (c) The company was required to pay demurrage to John Maslen pursuant to clause 23.4 Repainting, as the repainting of John Maslen's truck took longer than seven (7) days. (d) Mr Maslen presented his truck for repainting on 18 October 2010. The truck was repainted and made available to him for pick-up on 12 November 2010. Demurrage is payable if the repainting continues beyond seven (7) days. The number of days beyond seven for which the truck was not available to John Maslen was eighteen (18) days. The demurrage claim against the company (for which an order was sought), was $5,565.92. (e) The interpretation approach to be adopted by the Commission, when reading the relevant provisions of the Readymix Determination, was that laid down in Kingmill Australia Pty Ltd t/as Thrifty Car Rental v Federated Clerks Union of Australia, New South Wales Branch (2001) 106 IR 217 ("Kingmill"). (f) The union rejected the company's written submission. For the Company 21Mr Diamond on behalf of the company, provided a written outline of submissions on 6 April 2011 and spoke to that document on the second day of the hearing. Mr Diamond made the following points: (a) The union's reading of clause 23.4 Painting, was rejected. (b) Clause 23.4 Repainting, was not to be read in isolation. A contract carrier had to comply with all relevant obligations under the Readymix Determination, in order to claim the benefit of demurrage: see clauses 2.3, 4, 13.1 and 20.1. (c) The relevant obligations require a contract carrier to supply cartage services for the company in order to satisfy the demands of the company's customers. (d) When the company requires a carrier to make his/her truck available for repainting, then the carrier is offered the use of a company truck in order for the carrier to meet his/her obligations to provide cartage services. The Readymix Determination does not specify that a carrier has the discretion not to provide a service. If the company makes an offer to provide a company truck to the carrier (during repainting), then the carrier is obliged to accept that truck (unless excellent reason existed to the contrary) in order to provide cartage services. CONSIDERATION The issue before the Commission is whether or not contract carriers are eligible to be paid demurrage (whilst their trucks are off the road being repainted at the direction of the company) and in the circumstance where the company has offered the contract carriers the loan of a company truck to continue to provide cartage services - whilst their trucks are off the road being repainted. The union submits that the carriers are entitled to reject the offer of a company truck and if the repainting of their truck exceeds seven (7) days, then payment of demurrage by the company to the carriers, applies. The company rejects that submission. The company submits that the carriers are obliged to accept the offer of the loan of a company truck - unless there are excellent reasons for not so accepting the offer. This qualification by the company comes from a memorandum issued on 3 November 2010. Both the union and the company rely upon their interpretation of Clause 23.4 and other clauses of the Readymix Determination for their respective positions. Award Interpretation Principles In deciding this matter, the Commission must have regard to the principles of award interpretation. Those principles were clearly outlined in the decision of a Full Bench in Kingmill at paragraphs 63 and 64, which are extracted below: "63 The interpretation of awards are, in our view, to be approached in accordance with the principles authoritatively stated by the Full Bench of the Commission in Court Session in Bryce . Hungerford and Schmidt JJ stated there (at 452): In our view, in construing the true meaning of an industrial award, like any other instrument with legal force, the task requires an approach according to the actual words used and their plain, ordinary English meaning. As was said by Kelleher J in Re Dispute between Broken Hill Pty Co Ltd and the Federated Ship Painters and Dockers' Union of Australia, New South Wales Branch, Re Tank Tops [1961] AR (NSW) 312 at 314: "The meaning is to be ascertained primarily from a consideration of the words actually used and, while it is proper to pay regard to the surrounding circumstances and the purposes for which the provision was intended, this cannot justify a meaning being given to the words which they are not fairly capable of bearing. Particular words or expressions, having a special trade significance, however, may need to be construed in that light." 64 Their Honours approved the approach adopted by Olney J in Norwest Beef Industries Ltd v Australasian Meat Industries Employees Union of Workers (WA Branch) (1984) 12 IR 314 at 331 as follows: If it be the case that the correct approach to the interpretation of an industrial award is to read the document itself and give to the words used their ordinary commonsense English meaning (see Jackson J in United Furniture Trades Industrial Union v Dale Manufacturing Co Pty Ltd , 30 WAIG 539, at 540) then the first task in every case will be to determine whether the words used are capable in their ordinary sense of having an unambiguous meaning. If that question is answered in the affirmative then the further consideration of the expressed or supposed intention of the award making tribunal does not fall to be considered. The majority of the Full Bench in this case took that view when they said: "It is now trite law that when the meaning of language read in its ordinary and natural sense is obtained it is not necessary or indeed permissible to look to the intention of the parties." In my opinion the majority of the Full Bench has correctly stated the basic principle to be applied in the interpretation of industrial awards. Any other conclusion would lead to industrial anarchy. If the contrary were the case every employer, union official and indeed each employee would need to have available to him the expressed views of the award making tribunal whether they be expressed before or after the making of the award in order to determine the intention of the tribunal whilst the award itself would be rendered meaningless." 1 Clause 23 22The clause in question in this matter is 23.4 of the Readymix Determination (Ex 1, JM1). 23Clause 23 is headed 'Painting and Sign Writing'. In summary, Clause 23.1 deals with painting of a new truck supplied by the carrier (including cab chassis and wheels). Clause 23.2 deals with Painting of Agitator supplied by the Carrier. Clause 23.4 (the clause in question) deals with Repainting of the concrete truck and any Readymix supplied agitator. Clause 23.3 deals with the Finish of the painting work done under the terms of this clause and states that painting must be undertaken by a recognised truck painting contractor approved in advance by Readymix. This clause appears to apply equally to Clauses 23.1, 23.2 and 23.4. 24The full version of Clause 23.4 is as follows: "The Concrete Truck and any Readymix supplied agitator are to be repainted at the cost of Readymix at a time deemed appropriate by Readymix. The Carrier shall be responsible for the preparation of the chassis of the truck prior to repainting (eg. sandblasting). The Carrier shall make the truck available at the reasonable request of Readymix and at no cost to Readymix for the repainting to be completed. If painting is not completed within 7 (seven) calendar days then the Carrier shall be paid demurrage in accordance with Item 1 of schedule 1 for each additional day." 25The reference to Readymix in the above clause and elsewhere is to be read as a reference to "the company" or "the respondent" wherever those terms appear in this Decision. 26It needs to be noted that clause 23 does not contain a provision reflecting the company's claim that it can offer a carrier the loan of a company truck (whilst the truck is being repainted) and if the carrier refuses that offer (without excellent reason), then the carrier forfeits the entitlement to demurrage. 27Applying the principles of award interpretation as outlined in Kingmill, it is apparent that: Readymix's responsibility is to pay for the repainting and determine the time when the repainting is to occur. The Carrier's responsibility is to prepare the truck for repainting and make the truck available for repainting at the reasonable request of Readymix and at no cost to Readymix. If painting is not completed within seven calendar days, the Carrier shall be paid demurrage for each additional day thereafter that the truck is not available for use by the Carrier.. 28The above interpretation is based on the actual words used and their plain, ordinary English meaning . 29The Commission's finding as to the interpretation of the clause is that, as the responsibility for determining the time when the repainting is to occur rests with Readymix and the Carrier has a responsibility to make the truck available at the reasonable request of Readymix, then Readymix carries the obligation of paying demurrage if the repainting time takes longer than seven days. 30This interpretation is so because, under the terms of the clause, the Carrier has no say as to the time when the repainting will occur and more than that, the Carrier has a responsibility to make the truck available when requested to do so by Readymix. The entitlement to demurrage is to compensate the Carrier for the time that their truck is off the road. That is because the responsibility for the timing of the repainting is out of the Carrier's hands. If the Carrier supplies the truck for repainting when Readymix requests the truck for repainting, then the Carrier has complied with the provisions of the Readymix Determination so far as repainting is concerned. 31Mr Diamond submitted that the Carrier's entitlement to demurrage did not exist unless the Carrier had complied with other obligations under the Readymix Determination. In the Respondent's Outline of Submissions, Mr Diamond relied specifically on the obligations of Carriers pursuant to Clauses 4, 13.1, 2.3 and 20.1 (paragraphs 3 and 5). Mr Diamond further stated in those submissions, "Nowhere in the Determination is it said that the carrier can supply cartage services at times when it is convenient for the carrier" (paragraph 6). Mr Diamond's submissions relied heavily on the Respondent's proposition that if a Carrier was offered a company truck for use while the Carrier's truck was being repainted, and the Carrier declined to accept the offer of that company truck, then the Carrier had in effect forfeited their entitlement to demurrage payments. 32The Commission will now examine the four clauses on which the company relies to support its argument. Clause 4 33Clause 4 of the Readymix Determination deals with a Carrier's payment entitlements. Payment of those entitlements is subject to the Carrier complying with the provisions of the Readymix Determination. Mr Diamond relies on this clause in support of the company's argument as outlined above. As the Commission has already found, as long as the Carrier makes his/her truck available for repainting at the time requested by the company then, the Carrier has complied with their obligations under the Readymix Determination, in so far as repainting is concerned. Reliance on Clause 4 of the Readymix Determination does not assist the company's argument. Clause 13.1 34Clause 13.1 of the Readymix Determination states that the Carrier is to provide a manned and serviceable Concrete Truck for cartage. There is also an obligation that the Carrier must have a catalytic converter fitted to the truck if the company requires it. There are no other obligations on the Carrier in this clause. Given that the obligation rests with the Carrier to provide a manned and serviceable Concrete Truck for Cartage, the Commission cannot see how the company can use this clause in support of its argument that the Carrier is obliged to use a company provided truck if and when the company truck is offered to them. So long as the Carrier has provided a manned and serviceable Concrete Truck for cartage, the Carrier has complied with his/her obligations under the Readymix Determination so far as the Concrete Truck for cartage is concerned. Reliance on Clause 13.1 of the Readymix Determination does not assist the company's argument. Clause 2.3 35Clause 2 of the Determination deals with 'Appointment as an Independent Contractor'. Clause 2.3 states that the Carrier is responsible for providing the Concrete Truck necessary to provide the services required pursuant to this Determination. The Clause goes on to say that the Carrier must own the Concrete Truck and may use an appropriate financing mechanism if the Carrier so chooses. Once again, the obligations or responsibilities on the Carrier are that they are to provide the Concrete Truck and must own the Concrete Truck. There is nothing in this clause to support the company's submission that there is an obligation on the Carrier to use a company Provided Truck if and when the company Truck is offered. So long as the Carrier has provided the Truck and owns the Truck, the Carrier has complied with their obligations under this clause. Reliance on Clause 2.3 of the Readymix Determination does not assist the company's argument. Clause 20.1 36Clause 20.1 of the Readymix Determination sets out obligations with respect to Manning. The clause states that the Carrier must supply a Concrete Truck and Driver to mix, transport and deliver concrete for Readymix as and when required by Readymix. The clause goes on to deal with extended hours for delivery and fatigue management. Once again the obligation is on the Carrier to supply a Concrete Truck. There is also an obligation on the Carrier to supply a Driver for that truck. If the Carrier has complied with that obligation and supplied a Concrete Truck and Driver, then the Carrier has met their obligations under this clause. There is no obligation on the Carrier to accept the offer of a company Truck whatsoever. In fact, the obligation on the Carrier is quite the reverse. Reliance on Clause 20.1 of the Readymix Determination does not assist the company's argument. 37The Commission finds that none of the examined four clauses place any obligation on a Carrier to accept a company provided Truck if and when it is offered to them. Specifically, Clause 2.3 of the Readymix Determination states that the Carrier is responsible for providing the Concrete Truck necessary to provide the services required pursuant to this Readymix Determination and that the Carrier must own the Concrete Truck (emphasis added). It is important to note that these are the terms under which the Carrier is appointed under the Readymix Determination. Given the terms of Clause 2.3, it follows that work done by the Carrier, must be done in the truck that the Carrier owns (either outright or under finance) in order for the Carrier to maintain their appointment under the Readymix Determination. It follows that a Carrier cannot be appointed under the Readymix Determination to do the work if this obligation is not met. CONCLUSION 38The Commission finds that under the Readymix Determination, the company cannot require a Carrier to accept the offer of a company owned truck (whilst the Carrier's truck is being repainted pursuant to clause 23). To do so would be contrary to the clear and unambiguous requirements of Clause 2.3. 39The company submitted at paragraph 17 of their Submissions dated 9 May 2011, that 'if the Respondent cannot offer a company truck then there is no dispute over the application of the demurrage provisions within Clause 23.4.' 40The union advised in its written submissions that it was seeking an order in favour of its member, Mr John Maslen, for demurrage payments not made to him by the company. There were two claims for demurrage: $1739.35 and $3826.75 (Ex 1, JM2 and JM3 respectively). The total demurrage claim is $5566.10. There was also a claim for interest. 41The union advised the company and the Commission it would file a section 380 small claims application. No such application was made. 42The Commission declines to make an order in respect of the interest claim. 43Absent a section 380 application, the Commission is unable to issue an order against the company that it pay the sum of $5566.10 as a demurrage payment. When the union files its section 380 application, the Commission will issue a supplementary decision setting out the appropriate orders. 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. Decision last updated: 27 July 2011