Industrial Relations Commission New South Wales Medium Neutral Citation: Transport Workers' Union of New South Wales on behalf of Lynch trading as Carnly Holdings Pty Ltd v Nationwide Transport & Logistics Pty Ltd [2012] NSWIRComm 15 Hearing dates: 27 February 2012 Decision date: 14 March 2012 Jurisdiction: Industrial Relations Commission Before: Boland J, President Decision: (1) The respondent shall pay to David Lynch trading as Carnly Holdings Pty Ltd an amount of $47,770 plus interest. (2) The amount ordered in (1) shall be paid within 14 days of the date of this decision. Catchwords: CONTRACT DETERMINATION - Application by contract carrier for contract determination - Contract summarily terminated by principal contractor - Contract carrier sought compensation - Principal contractor chose not to defend claim - Termination of contract of carriage unfair - Compensation ordered Legislation Cited: Industrial Relations Act 1996 Category: Principal judgment Parties: Transport Workers' Union of New South Wales on behalf of Lynch trading as Carnly Holdings Pty Ltd (Applicant) Nationwide Transport & Logistics Pty Ltd (Respondent) Representation: J V Murphy of counsel (Applicant) Pendlebury Workplace Law (Applicant) No appearance by respondent File Number(s): IRC 1554 of 2011 IRC 1857 of 2011 DECISION 1On 28 September 2011, David Lynch trading as Carnly Holdings Pty Ltd filed an application (Matter No IRC 1554 of 2011) under s 314 of the Industrial Relations Act 1996 seeking the reinstatement of a contract determination with Nationwide Transport & Logistics Pty Ltd ("the respondent"). 2It was subsequently brought to Mr Lynch's attention that as a single contract carrier he had no standing to bring the application: s 311 of the Industrial Relations Act . 3On 9 December 2011, the Transport Workers' Union of New South Wales (TWU) filed an application (Matter No IRC 1857 of 2011) on behalf of Mr Lynch seeking the same relief as that sought in Matter IRC 1554 of 2011. The TWU has the necessary standing: s 311(1)(d) of the Industrial Relations Act . Mr Lynch worked under the Transport Industry - General Carriers Contract Determination. 4A conference pursuant to s 315 of the Industrial Relations Act was conducted on 2 December 2011 but Mr Lynch's claim was unable to be resolved. 5The relief sought in the TWU's application was in the following terms: That the contract of carriage which existed between David Lynch, trading as Carnly Holdings Pty Ltd, on the one hand and Nationwide Transport & Logistics Pty Ltd on the other hand, be reinstated along with compensation for loss of income between the date of termination and the date of reinstatement calculated at $5,000 gross per week, plus GST, plus the amount of $15,138.71 gross, plus GST, representing unpaid and outstanding invoices from the weeks ending 21/8/11, 28/8/11, 4/9/11 and 11/9/11 , plus bank charges incurred for late payment of $500, plus interest and costs. In the alternative: That Nationwide Transport & Logistics Pty Ltd pay David Lynch, trading as Carnly Holdings Pty Ltd, the amount of $15,138.71 gross, representing unpaid and outstanding invoices from the weeks ending 21/8/11, 28/8/11, 4/9/11 and 11/9/11 , plus, the amount of $130,000 gross, plus GST, representing 26 weeks' compensation calculated at $5,000 gross per week, plus GST, plus bank charges incurred for late payment of $500, plus interest and costs. 6The application was supported by two affidavits of Mr Lynch, the first filed on 1 February 2012 and the second filed in Court on 27 February 2012. The first affidavit had a number of attachments including emails to which reference will be made, invoices indicating weekly earnings in 2010 and up to July 2011 and evidence regarding the cost of an extendable trailer purchased in 2005. 7In the first affidavit Mr Lynch explained how he came to be contracted to the respondent and the runs he undertook as part of his contract. The work involved the transportation of steel products mainly in the Sydney Metropolitan area using the extendable trailer Mr Lynch purchased in 2005. 8In August 2011, a problem arose in that Mr Lynch had not been paid by the respondent for work performed and invoiced. Mr Lynch approached an administrative assistant of the respondent and was advised payment would be made. Payment was not made and Mr Lynch was advised by the respondent's Newcastle Site Manager that payment had been delayed but it would be forthcoming. The payment was not forthcoming on the day promised (5 September 2011). Consequently, Mr Lynch advised one of the respondent's customers "OneSteel" that unless he was paid he could not afford to keep working or running his truck and that he was putting OneSteel on notice that he would have to cease working if he was not paid. 9On 6 September 2011 Mr Lynch composed an email to the Newcastle Site Manager informing her that payment had not been made and, therefore, he could not continue to work until he had received payment for work completed over the previous seven weeks. The email was copied to a Mr Palladino of OneSteel. 10Mr Lynch understood the Newcastle Site Manager forwarded his email to Mr Phillip Foster who, Mr Lynch understood, owned the respondent. Mr Foster telephoned Mr Lynch on 6 September 2011 and terminated his contract effective immediately. Mr Lynch appears to have made a record of his conversation with Mr Foster. Mr Lynch's affidavit states: Below is a record of the phone call with Mr. Foster: Mr. Foster: Is that David Lynch. Mr. Lynch: Yes, who's speaking. Mr. Foster: It's Phil Foster from NTL, there was a mix up with your pay, but you will be getting paid today. Mr. Lynch: Ok. Mr. Foster: By the way don't bother coming to work tomorrow. Mr. Lynch: Why is that? Mr. Foster: Because you don't speak to my customers. Mr. Lynch: Ok then. To date I have not been informed of who the customers are that I spoke to, or what speaking to Mr. Foster's customers entails or means, and why I have lost my work with NTL. Prior to Ms. Keough forwarding my email onto Mr. Foster on 6 September 2011, I had never had any dealings with him either via telephone or email. When Mr. Foster phoned me at 8:11 am on 6 September 2011, this was the first time I had ever spoken to him. I do not understand why Mr. Foster terminated my engagement with NTL, I simply had asked to be paid monies that were owed to me by NTL and were overdue for which work had been completed in good faith. When I sent the email to Ms. Keough on 6 September 2011, I had already been promised three (3) times that payment would be made but it had not happened. Mr. Foster had never made any attempt to inform me why payments were late, and querying this seems to have infuriated Mr. Foster to the point of terminating my engagement. It seems to have angered Mr. Foster that I would not continue to work for him without payment. Mr. Foster's allegation accusing me of speaking with customers is simply false. The only person I spoke to regarding my non-payment was Mr. Palladino, at his request, and my allocator, so he could make arrangements should I stop working. 11Counsel for Mr Lynch, Mr J Murphy, indicated that Mr Lynch was not pressing the claim for reinstatement of the contract with the respondent for the reason that the respondent was no longer undertaking work for OneSteel, which was the company Mr Lynch had been servicing for successive transport companies since 2004. Relying on s 314(4) Mr Murphy sought compensation. That provision and s 314(5) are in the following terms: (4) If the Commission considers that it would be impracticable to make a determination for reinstatement, the Commission may order the bailor to pay to the driver, or the principal contractor to pay to the carrier, an amount of compensation not exceeding the amount of remuneration of the driver or carrier under relevant contracts during the period of 6 months immediately before the termination of the contract. (5) When assessing any compensation payable, the Commission is to take into account whether the driver or carrier made a reasonable attempt to find alternative engagements and the remuneration received in alternative engagements, or that would have been payable if the driver or carrier had succeeded in obtaining alternative engagements. 12In his second affidavit Mr Lynch indicated that he wished to revise the money amount of his claim by removing running costs from his original claim and deducting monies earned since September 2011. In his affidavit Mr Lynch stated: 3. My contract of carriage with the Respondent was terminated by it on 6 September 2011. During the six months immediately before that date, my remuneration under the relevant contracts, carting products for Onesteel, was $110,264.30. If necessary I can produce bank records to verify this amount. 4. I accept that a proportion of the amount referred to in paragraph 3 above was referrable to running costs. I have not incurred running costs on account of performing cartage work for the Respondent since 6 September 2011. 5. I estimate the percentage of the total remuneration paid to me during the six months prior to 6 September 2011 which was attributable to running costs to be 25%. 6. I note that this estimate is not far out of line with the percentage discount for running costs for a truck of the type which I operate, as set out in Schedule A to the Transport Industry - Redundancy (State) Contract Determination, namely 28.52%. 7. Using this percentage discount, the amount I received which was not attributable to running costs was $78,817. This is the amount I am claiming as compensation for the termination of my contract by the Respondent. 8. Since 6 September 2011 I have been attempting to get work for myself and my truck and trailer. I have made contact with a range of transport companies including Tolls, K & W Haulage, All Along Transport, Dobel Express, Hannahs Haulage, Border Express, PVG Transport and a number friends involved in the transport industry. 9. I have had difficulty securing alternative work due to the specialised nature of the truck and trailer that I operate, and the general economic conditions. 10. I have been given some intermittent work by some of the companies mentioned in paragraph 8 above. As a result of this work, I have earned a total of $43,435. Using the same percentage of 28.52% attributable to running costs, the amount have received which was not attributable to running costs was $31,047. If the Court were to discount my claim by this amount the resultant amount would be $47,770. 13The amount of compensation claimed by Mr Lynch is, therefore, $47,770 plus interest. 14In the week prior to the hearing of the matter on 27 February 2012 my Associate sought to contact the respondent to inquire about an apparent failure to comply with directions concerning the filing of evidence. In this respect, I stated at the outset of the proceedings on 27 February: On the 24 February at 4.07 my Associate ... emailed Mr Foster for the respondent and said; "I refer to my telephone call with you late this afternoon in relation to the above mentioned matter. You indicated that Nationwide Transport and Logistics Pty Ltd were not going to defend the application for contract determination of reinstatement listed for hearing on Monday 27th and Tuesday 28 February 2012. I request that you provide the court notice of this in writing which you indicated your intention to do so. I ask you to do this as a matter of urgency and also request you forward a copy to the applicant's solicitors, Ms Pendlebury. I understand you have her details." And then there was a response to that by Mr Phillip Foster at 5.36pm on the 24 February: "... as per my phone conversation I wish to confirm we will not be attending court on this matter." 15It would appear from the file that the respondent was initially represented by a firm of solicitors, but according to an affidavit filed in the proceedings of Mr Lynch's solicitor, Ms Pendlebury, she was advised on 25 January 2012 that the firm of solicitors no longer acted for the respondent. 16There is no doubt the respondent was fully aware of the proceedings and was provided with every opportunity of defending the matter, but for reasons not explained to the Commission chose not to file any evidence and chose not to appear on 27 February. 17Sections 314(1) and (3) of the Industrial Relations Act provide: (1) The Commission may, after inquiry, make a contract determination with respect to the reinstatement of a contract of bailment or contract of carriage that has terminated. ... (3) A contract determination under this section may be made on such terms and conditions as the Commission thinks fit, including provision for any period after the termination of the contract to be treated as a period of engagement under relevant contracts. 18The evidence was that in August 2011 Mr Lynch had not been paid by the respondent for work performed and invoiced. He made inquiries and was advised payment would be made by a certain date. That did not occur. Mr Lynch continued in his attempts to obtain payment and in the course of doing so advised a customer of the respondent whom he had been servicing for some years of the difficulties he was having and the probability he would be unable to make deliveries if his invoices were not paid. 19On 6 September 2011 Mr Lynch was advised by Mr Foster that his engagement with the respondent was summarily terminated. The apparent reason was that Mr Lynch had advised a customer of the respondent of the fact he had not been paid for work done. 20I accept the applicant's contentions that the termination of the contract was unfair. Mr Lynch had a long association with OneSteel and officers of OneSteel, such as Mr Palladino. That he advised Mr Palladino of the difficulties that he was having obtaining payment, having been asked by Mr Palladino to "keep him in the loop" about those difficulties, did not constitute proper grounds for summary termination. OneSteel clearly had an interest in being informed because of the prospect of an interruption to supply. The failure by the respondent to make the payment when promised placed Mr Lynch in the position of being unable to continue with his business. It was not inappropriate in the circumstances for Mr Lynch to advise a customer whom he had been servicing for a number of years of his difficulties and the implications for the customer of supply. 21As counsel for Mr Lynch submitted, there was suggestion in the pleadings from the respondent filed on 21 November 2011 that Mr Lynch made "defamatory comments" in his email of 6 September 2011 concerning the respondent's ability to meet its obligations as and when they fell due. A reading of the email suggests no such thing. The email simply recounts factually the circumstances Mr Lynch found himself in. The fact the respondent may have felt embarrassed was essentially caused by its own actions in failing to pay Mr Lynch on time and then failing to meet a further deadline for payment that it set itself. 22The Commission accepts that it is impracticable to reinstate the contract of carriage between David Lynch trading as Carnly Holdings Pty Ltd and the respondent. Accordingly, the Commission proposes to order compensation on the basis of Mr Lynch's revised claim, which the Commission considers is wholly justified. Orders 23The Commission makes the following orders: (1) The respondent shall pay to David Lynch trading as Carnly Holdings Pty Ltd an amount of $47,770 plus interest. (2) The amount ordered in (1) shall be paid within 14 days of the date of this decision. ********** 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: 14 March 2012