Industrial Relations Commission New South Wales Medium Neutral Citation: Transport Workers' Union of New South Wales (on behalf of Robert Lloyd) and Toll Pty Ltd trading as Toll Intermodal [2013] NSWIRComm 1017 Hearing dates: 6 June and 14 August 2013 Decision date: 18 September 2013 Jurisdiction: Industrial Relations Commission Before: Stanton C Decision: Application dismissed Catchwords: Notice to upgrade vehicle - moratorium granted pending retirement - further extension sought - dispute proceedings - termination of contract of carriage - varied operational requirements of business - afforded procedural fairness - termination not harsh, unjust or unreasonable - application dismissed. Legislation Cited: Industrial Relations Act 1996 Cases Cited: Cherry v Allied Express Transport (1997) 73 IR 305 Antonakopoulos v State Bank of NSW (1999) 91 IR 385; Humphries v Cootamundra Ex-Services and Citizens' Memorial Club Ltd (2003) 128 IR 37 Thomas Arthur and Jeanette Ann Gaddess by AJ Mills v Sons trading as Mills Transport [1999] NSWIRComm 297 Deltec International Courier Pty Limited v Transport Workers' Union of Australia, New South Wales Branch (1993) 50 IR 341 Outboard World Pty Limited T/as Budget Waste Control (Sydney) v Muir (1993) 51 IR 167 A & M Thompson Pty Ltd v Total Australia Ltd [1980] AR (NSW) 399 Davis v General Transport Development Pty Ltd) [1967] AR 371 Byrne & Anor v Australian Airlines Limited [1995] HCA 24 Category: Principal judgment Parties: Transport Workers Union of New South Wales (on behalf of Mr Robert Lloyd) (Applicant) Toll Proprietary Limited trading as Toll Intermodal (Respondent) Representation: Mr A Guy of Counsel (Applicant) Mr D O'Sullivan of Denman Chambers (Respondent) File Number(s): IRC 576 of 2012 DECISION 1This matter concerns an application filed by the Transport Workers Union of New South Wales ("the Union") on behalf of Mr Robert Lloyd, a sole trader, against Toll Proprietary Limited trading as Toll Intermodal ("Toll"). The application filed is for a of contract determination of reinstatement for Mr Lloyd against the respondent pursuant to s 314 of the Industrial Relations Act 1996 ("the Act"). Background 2Mr Robert Lloyd commenced working for Toll in or around March 1988 following a take-over by Toll of the company where he had previously been engaged. Mr Lloyd provided services to Toll as a contract carrier with an eight tonne vehicle. In or around late April or early May 2010, Toll identified a need for Mr Lloyd to upgrade his vehicle to a 12 tonne vehicle to meet the operational requirements of customers. 3On 21 May 2010, Toll issued Mr Lloyd with a notice pursuant to Clause 19 of the Transport Industry - General Carrier's Contract Determination requiring him to upgrade to a 12 tonne vehicle. 4Due to his impending retirement at the time, Mr Lloyd was not in a position to provide a new vehicle and through his Union delegate, Mr Euan Scott-Bell, made a request that the requirement for a 12 tonne vehicle be withdrawn. Mr Lloyd asserted that shortly after Mr Scott-Bell's intervention, Toll verbally agreed to rescind the formal notice to upgrade his vehicle. 5Toll asserts it granted Mr Lloyd a reprieve from the requirement to upgrade his vehicle as he intended to retire in or around June 2011. 6In June 2011, Toll's State Road Operations Manager - NSW, Mr Aaron Leach, met with Mr Lloyd and Mr Scott-Bell. During the course of that meeting Mr Scott-Bell requested an extension to the arrangement agreed to in June 2010 for a further 6 months as Mr Lloyd wished to retire at the end of that year. During a further meeting in late June 2011, Mr Lloyd was informed that Toll could no longer sustain him utilising an eight tonne vehicle and he would either have to upgrade to a 12 tonne vehicle or become an ad-hoc contractor. 7Mr Lloyd was subsequently given an opportunity to work on a specific Toll contract for local deliveries for Wrigley's. Mr Lloyd commenced a trial undertaking the Wrigley's work in late July or early August 2011. That trial lasted approximately two weeks. On 9 August 2011, Wrigley's requested Toll commence using 12 tonne vehicles for delivery of their products following a freight cost analysis. Mr Lloyd subsequently returned to the Toll yard on 9 August 2011. 8Shortly thereafter the Union filed a dispute notification pursuant to section 332 of the Industrial Relations Act 1996. The matter was subject to conciliation on 26 September and 6 October 2011 when Toll informed the Commission Mr Lloyd 's engagement had been terminated. On 10 May 2012, the Union filed this application for reinstatement. A hearing scheduled to commence on 20 July 2012 was vacated due to the ill health of Mr Lloyd. The application was subsequently stood over generally pending advice that Mr Lloyd was fit and well for the hearing. Applicant's Evidence Mr Robert Lloyd 9Mr Lloyd deposed he had operated an eight tonne table-top truck for the purposes of carting general goods for Toll since March 1988. During that time he had never been involved in an accident nor had he been disciplined by Toll for unsatisfactory work performance. 10Mr Lloyd stated that since March 1988, he had made at least three requests to Toll to upgrade his truck to a 12 tonne vehicle. Those requests had been rejected. On 21 May 2010 Mr Lloyd received correspondence from Mr Andrew Littlewood, New South Wales Distribution Manager requesting he provide a 12 tonne vehicle to meet the requirements of Toll's business. Approximately a week later, Mr Leach, returned from leave. Mr Scott-Bell and Mr Lloyd subsequently approached Mr Leach and the following conversation ensued: Scott-Bell: What's this letter? Bobby's going to be retiring soon and it doesn't make sense to put on a 12 ton truck for the few years he's going to stick around. Leach: Leave it with me. Scott-Bell: Well you've given him four weeks to get the new truck on, what are you going to do about it? Leach: Well I'll rescind it (the letter requesting a new truck). 11It was Mr Lloyd's evidence that Mr Leach did not provide correspondence rescinding the request to provide a new vehicle and in that regard he had asked Mr Scott-Bell on a number of occasions whether the letter had been received and each time Mr Scott-Bell said that he had made a request but the letter had not been provided. 12Mr Lloyd contended that Mr Leach would approach him regularly and make "back handed" comments concerning the fact that he had not upgraded his vehicle. Such comments included "You'd probably get more work if you got a bigger truck."1 13Mr Lloyd recalled that in June 2011, Mr Leach approached him and said: Leach: Bob, work's drying up for you. You might get two or three days a week, that's all I can promise you. 14Mr Lloyd subsequently had the following conversation with Mr Scott-Bell: Lloyd: Leach tells me that my work's drying up, and they're going to get rid of me. Scott-Bell: They can't do that, they've got an eight tonner on Wrigley's run that's outside hire. They can get rid of them and give you that run. Lloyd: That's a good idea, let's go and see Aaron. Shortly thereafter, he accompanied Mr Scott-Bell to meet with Mr Leach and the following conversation ensued: Scott-Bell: What's the go with the outside hire at Wrigley's? You can't have no work for Bob and outside hire doing the Wrigley's run. Can Bobby take it over? Leach: Yes, but he's got to learn a few things, like how to pick up keys and whatnot. You'll need to do three or four days training. You have to promise not to stay only a few weeks, you're going to have to stick around. Lloyd: Yeah, I'll do it: you have my work I'll stick around. Leach: Yeah ok, it's now your job. 15Mr Lloyd subsequently undertook four days training concerning the Wrigley's run and commenced operating the run solo on or about 1 August 2011. After completing his first week without incident he received a telephone call from Mr Leach and the following conversation ensued: Leach: Wrigley's management want a 12 ton truck for the run. But don't worry; come back to the yard on Monday. Lloyd: Alright then, will do. 16The following Monday, Mr Lloyd returned to the Toll yard as requested and undertook normal delivery work with his eight tonne vehicle. The Fleet Operator contacted him the next day and said, "I'll call you tomorrow at seven and let you know if there is any work on." Mr Lloyd subsequently recalled that on the Wednesday, the Fleet Operator called him at approximately 6:30am and said "It's a bit quiet, there's no work for you today." On the Thursday, he called the Fleet Operator and asked, "What's the go today?" The Fleet Operator said, "There isn't any eight tonne work." He subsequently contacted Mr Scott-Bell and the following conversation ensued: Lloyd: Mate, what's going on with this? Scott-Bell: I've seen Aaron and he's said to stay put, he'll give you a call when he needs you. 17Mr Lloyd stated he received no further telephone calls from Toll or Mr Leach and did not receive "a letter or payment for my termination." 18At the time of the hearing, Mr Lloyd was 71 years of age. Mr Lloyd also stated that since his dismissal he had not worked and was living off savings. 19In cross-examination, Mr Lloyd stated he had made no attempts to find alternative work since "his dismissal" from Toll. Mr Lloyd explained that when he received the initial request to upgrade his vehicle, he first approached Mr Eric Martin who was the Union delegate for subcontractors at the Toll yard rather than Mr Scott-Bell to press his case. 20Mr Lloyd denied telling Mr Martin that he proposed to retire in 12 months and on that basis sought a moratorium on the requirement to upgrade to a 12 tonne vehicle until his retirement. However, he did admit saying to Mr Martin that he proposed to retire "shortly". Mr Lloyd denied Mr Martin had warned him not to paint himself into a corner by advancing the position that he proposed to retire in 12 months time and seek the moratorium on upgrading the vehicle. Shortly thereafter Mr Lloyd approached Mr Scott-Bell and informed him of his intention to retire. He denied asking Mr Scott-Bell to approach management and put an offer to them that he was proposing to retire in 12 months time asking that they hold off on the requirement to upgrade his vehicle from eight tonnes to 12 tonnes. He further denied that during the course of a meeting involving Mr Leach and Mr Scott-Bell in or around late May or early June 2010, he said to Mr Leach words to the effect "I'm retiring in 12 months time. Can't you let me drive my truck until then rather than having to buy a new one?" 21Mr Lloyd agreed that Mr Leach did not tell him personally that he was proposing to rescind the 21 May 2010 letter concerning the requirement to upgrade his vehicle. Mr Lloyd subsequently agreed that at some stage prior to June 2011, he had decided he was not going to retire in June 2011. He also agreed Mr Leach never refused to meet with Mr Scott-Bell on his behalf. 22Mr Lloyd denied that shortly after Toll's further request in June 2011 to upgrade his vehicle to a 12 tonne truck, Mr Scott-Bell informed Toll that he was now seeking to retire in six months time. With reference to the Wrigley's run, Mr Lloyd agreed that Mr Leach had approached him asking him to undertaking that work. 23Mr Lloyd could not recall whether Mr Scott-Bell had told him he had a choice of upgrading his vehicle or trialling the Wrigley's run. Mr Lloyd recalled that in or around 10 August 2011, he received a telephone call from Mr Leach concerning Wrigley's customer requirements and that Wrigley's would now require a larger truck to deliver its goods. Mr Euan Scott-Bell 24Mr Scott-Bell is the former senior Union delegate for the Toll Chullora site. A copy of a letter dated 21 May 2010 addressed to Mr Lloyd was marked Attachment 'A' to his statement. That letter, signed by Mr Littlewood, stated: In confirmation of recent discussions regarding your current vehicle with an 8 tonne/12 pallet carrying capacity, please note that due to the changing scope and nature of the transport/freight industry we now request that you upgrade your vehicle to allow for a greater carrying capacity to a minimum of 12 tonne/12 pallet configuration. As Toll SPD is the "principle contractor" as per the terms set out in the "General Carriers Contract Determination" (clause 19, paragraph 6) we are obliged to offer you one months notice from the date of this letter to act on the above request. If you would like any assistance with regard to vehicle type and or specifications please feel free to discuss this matter with your direct line manager. Your early attention to the above is kindly appreciated. Thank you for your continued and ongoing support. 25Mr Scott-Bell deposed in or about late May 2010, Mr Lloyd approached him and the following conversation ensued: Lloyd: I'm not getting on with Eric Martin, Sub-Contractor Delegate - Toll Chullora) can you have a look at this? (Mr Lloyd then handed me the Toll letter dated 21 May 2010). I'm planning on retiring; I don't think its fair for me to buy another truck at this stage. Would you be able to go in and ask the Company whether I'll be able to keep my truck on for another 12 months? Scott-Bell: Yeah, no worries mate, I'll give it a go. 26Mr Scott-Bell later met with Mr Leach when the following conversation ensued: Scott-Bell: What's going on with Bobby? We've got a bloke with over 27 years of employment and I find it a little unreasonable that the company is taking this stand. He's had a reliable truck and he has a strong work ethic. I've also been told that his truck is better suited for the work you have here. Also, he's upgraded his truck 3 times already in his career and he's asked to put on a 12 tonner but you've said no, can he stay on for another 12 months? Leach: It's out of my hands mate, but I'll take it up with Andrew Brown (NSW State Manager, Toll). 27Mr Scott-Bell approached Mr Leach again as he had heard nothing concerning Mr Leach's representations to Mr Brown. The following conversation ensued: Scott-Bell: I haven't heard anything from you about Bobby but can we assume that he has the 12 months? If that's the case can I have a letter terminating the previous one. Leach: Yeah, I'll see what I can do. 28It was Mr Scott-Bell's evidence that no further correspondence was received from Mr Leach or Toll rescinding the request for Mr Lloyd to upgrade his vehicle. 29Mr Scott-Bell stated that on or around 15 June 2011, he met with Mr Lloyd and Mr Leach concerning a 12 month extension to Mr Lloyd's contract. Mr Lloyd subsequently instructed him to request a further six month extension to his contract with Toll. However, during the course of that meeting, Mr Leach gave Mr Lloyd two weeks notice that his contract with Toll would cease on 30 June 2011. Shortly thereafter, the following conversation ensued: Scott-Bell: Aaron, we're asking the Company if it's possible for Bob to continue his service with Toll until Christmas and Bob will retire in the new year. Bob feels that his configuration is an asset to the Company as it is preferred by some customers. Leach: Alright then, well I can't make this decision but I'll talk to Andrew Brown and see what he has to say. 30Mr Scott-Bell met again with Mr Leach on or about 21 June 2011 and the following conversation ensued: Scott-Bell: Is there any change in the Company's position on Bob? Will you be extending his contract? Leach: No. Scott-Bell: Well then I need a meeting with Andrew Brown. 31Mr Scott-Bell convened a meeting with Mr Leach and Mr Brown on 29 June 2011 where he presented Mr Lloyd's case. During the course of that meeting, Mr Brown suggested two options for Mr Lloyd's consideration: (1)Mr Lloyd upgrade to a 12 tonne, 14 pallet truck and have ongoing engagement; or (2)Leave his current engagement on 30 June 2011 and come back the following day has a sub-contractor on the same hourly rate, but on an ad-hoc arrangement. Mr Brown also agreed during the course of the meeting to consider Mr Scott-Bell's request that Mr Lloyd be placed on the Wrigley's run in lieu of outside hire. 32Mr Lloyd contacted Mr Scott-Bell the following day and informed him he would take the second option and become a subcontractor. He also asked Mr Scott-Bell to press the Wrigley's contract with Mr Leach. Mr Leach subsequently agreed to the request subject to Mr Lloyd completing the necessary training. However, shortly after commencing the Wrigley's contract, Mr Lloyd was informed he was no longer required as the contract was moving in house. 33On or about 15 September 2011, Mr Lloyd telephoned Mr Scott-Bell and the following conversation ensued: Lloyd: Euan, I haven't worked for 4 weeks straight, and I've only had 1 or 2 days work since the Wrigley's contract stopped. Scott-Bell: I'll ring my organiser and get on it. 34Mr Scott-Bell reported Mr Lloyd's plight to Ms Jelena Cindric, an official of the Union. 35In cross-examination, Mr Scott-Bell agreed that in or about late May 2010, Mr Lloyd spoke to him about the letter he had received from Toll requesting him to upgrade his vehicle. He further agreed that during the course of that conversation, Mr Lloyd told him that he was intending to retire shortly. Elaborating on his discussion with Mr Lloyd, Mr Scott-Bell said Mr Lloyd had suggested to him that he was intending to retire in about 12 months time. It was against that backdrop that he approached Mr Leach to defer the request that Mr Lloyd upgrade his vehicle. Mr Scott-Bell was unsure as to whether Mr Lloyd was present at the meeting with Mr Leach. 36Mr Scott-Bell stated he raised a number of issues with Mr Leach including the fact that it was unfair for Mr Lloyd to have to purchase a new vehicle when was retiring in 12 months time. 37Mr Scott-Bell confirmed that despite a number of requests to Mr Leach, Mr Brown did not provide a letter of retraction with respect to the requirement that Mr Lloyd upgrade his vehicle. Mr Scott-Bell also confirmed that during the course of the meeting with Mr Leach on 15 June 2011, he informed him that Mr Lloyd was intending to retire in or around Christmas 2011. Mr Scott-Bell later agreed that it was possible during the course of the meeting convened on 29 June 2011, that he did not inform Toll anything other than Mr Lloyd was proposing to retire at the end of 2011. Mr Scott-Bell subsequently agreed that Toll agreed to the request that Mr Lloyd not be required to upgrade his vehicle as he was intending to retire in 12 months time. He further acknowledged that towards the end of that 12 month period in mid-June 2011, Toll made it clear that it required Mr Lloyd to upgrade his vehicle from eight to 12 tonnes. Respondent's Evidence Mr Eric Martin 38Mr Martin is a sub-contract carrier engaged by Toll. He has been the Union delegate for sub-contract carriers at the Chullora site since 2004. 39Mr Martin deposed that on or about 21 May 2010, Mr Lloyd approached him and explained that he had received a letter from Mr Littlewood requesting that he upgrade his vehicle from eight to 12 tonnes. Mr Martin deposed that during the week commencing 24 May 2010 he met with Mr Littlewood and another person to discuss Mr Lloyd's concerns. He met Mr Lloyd the following day and explained to him that he may have a claim for "retrenchment" concerning the need to upgrade his vehicle. He recalled the following conversation ensued: Martin: I met with the company yesterday and discussed the letter. I think you may have a claim. Lloyd: I don't want a claim, I just want to work for another year and then retire. Martin: You need to consider this carefully as you don't want to paint yourself into a corner. 40In or around 31 May 2010, Mr Scott-Bell approached Mr Martin in his capacity as Union delegate for full-time employees engaged at the Chullora site. Mr Scott-Bell told him that a meeting had been held with Mr Lloyd, Toll and himself. Mr Martin recalled the following conversation between himself and Mr Scott-Bell: Scott-Bell: We have Bob for another year. Martin: I think they had the wrong clause, but if that's what Bob wants that's OK. Scott-Bell: Do you want a copy of the letter? Martin: No, you did the deal, not me. It was Mr Martin's evidence that he understood from his discussion with Mr Scott-Bell that Mr Lloyd had been granted a 12 month reprieve. 41Mr Martin stated that in late May 2011 Mr Brown approached him in the yard and asked if he had heard anything about Mr Lloyd's retirement as the 12 months had elapsed. He subsequently informed Mr Brown that he was unaware of Mr Lloyd's intentions at that time. Shortly thereafter, he saw Mr Lloyd in the Chullora yard and told him about his conversation with Mr Brown concerning his retirement intentions. He recalled the following conversation ensued: Martin: Andrew Brown wants to know what's happening with your retirement, as it's coming up to 12 months. Lloyd: All I want to do is work up until Christmas. Martin: Bob, I told you if you agreed to this, this is what it would come to. Lloyd: You're my delegate, you are suppose to advise me. Martin: I did. I will ring the Union and see if there is anything they can do. 42Mr Martin deposed that following his discussions with Mr Lloyd in or around late May or early June 2011, he contacted the Union on two separate occasions and spoke to an organiser, Mr Ian Sherwood. Mr Martin recalled the following conversation he had at that occasion with Mr Sherwood: Martin: I think by making the 12 month arrangement Bob has shot himself in the foot. Sherwood: I think you are right. Martin: Can you see if there is anything you can do? I did not hear back from the union organiser, despite making two calls. 43Sometime after his discussion with Mr Sherwood he saw Mr Lloyd in the Chullora meal room who explained to him that he was doing work for Wrigley's and was happy with that arrangement. Soon after, Mr Lloyd contacted him and advised that he had only received one day's work in the past week and asked him to approach management to see what hours would be likely in the future. The following day Mr Martin approached Mr Leach and asked him during the conversation what work Mr Lloyd could expect. Mr Martin recalled the following conversation ensued: Martin: Bob has asked I find out what type of work he can expect moving forward. Leach: We had given Bob a go on the Wrigley's work, but they are going to start consolidating their loads and the smaller capacity of Bob's truck is going to see him unusable to do this work in an efficient manner. Martin: What does that mean in terms of what Bob can expect with work? Leach: I can't guarantee Bob work. 44Shortly after his meeting with Mr Leach, Mr Martin telephoned Mr Lloyd to explain the situation. Mr Martin recalled the following conversation ensued: Lloyd: Am I entitled to a redundancy? Martin: Given your request for the extra 12 months, you will basically be a casual. Lloyd: Can I have the number for the union Organiser. Martin: I gave Bob this telephone number. 45In cross-examination, Mr Martin confirmed Mr Lloyd had stated he wanted "to stay around" for a further 12 months when he spoke to him in May 2010. Mr Martin also confirmed that in or around May 2011 he informed Mr Lloyd of his discussion with Mr Brown concerning Toll's expectation that Mr Lloyd would shortly retire. During the course of those discussions Mr Lloyd indicated that he wished to stay on until Christmas 2011. Mr Martin stated that at the time he informed Toll that Mr Lloyd wanted further work. He also told Mr Lloyd that he would be finishing at the end of the financial year as Toll had already granted him a 12 month reprieve. When he met Mr Lloyd in the Chullora depot lunch room in or around late May or early June 2011, Mr Lloyd indicated to him that he was happy with the Wrigley's work and thought there was plenty of work available at that time. Mr Andrew Littlewood 46Mr Littlewood joined Toll in April 2010 and his current position is New South Wales Distribution Manager. Insofar as this matter is concerned he was responsible for the management of Toll's rigid fleet up until late 2011. 47In late April 2010, Mr Littlewood stated by Mr Brown asked him to arrange a meeting with Mr Lloyd concerning the suitability of his vehicle given, it's eight tonne capacity. At the time he understood Mr Lloyd's vehicle had a 12 pallet capacity and in response to increased weights in customer consignments, Toll was not able to use this vehicle in the most efficient manner possible. At the time Mr Brown also informed Mr Littlewood that due to the restrictive capacity of Mr Lloyd's vehicle, it could not take the weight of a full order and, on occasions, part of the load had to be left behind. Similarly Toll could not send Mr Lloyd's vehicle to a job because it was unable to take the client's full load. Shortly thereafter, Mr Littlewood said he had formed the view that Mr Lloyd's vehicle capacity was causing disruption to Toll's ability to service its customers. 48On 30 April 2010, Mr Littlewood met with Mr Lloyd to inform him of the requirement of Toll for him to upgrade his vehicle to a 12 tonne, 12 pallet vehicle. During the course of that meeting he explained to Mr Lloyd the changing nature of Toll's customer requirements which had resulted in load consolidation and increased pallet weights. Mr Littlewood stated the following conversation with Mr Lloyd ensued: Littlewood: Bob, after taking some time to review the needs of our customers and our fleet capacity it has become increasingly evident that your truck's capacity is not ideal. I need you to upgrade your vehicle to a 12 tonne, 12 pallet configuration. Lloyd: I have not intention of changing my vehicle, I was told previously that 8 ton was suitable. Littlewood: I do not know about that, or how long ago that was, but our requirements are changing, and we need you to upgrade your vehicle to allow us to best accommodate our customers requirements. Lloyd: I will be speaking to my Union Delegate. Littlewood: Bob, I'm not asking for a decision here on the spot. I understand it is a decision you may need to talk to your wife and family about, so have a think about your position over the weekend. Further, during the course of that meeting Mr Littlewood gave Mr Lloyd a copy of the relevant clause of the General Carriers Contract Determination. Following the meeting Mr Littlewood sent an email to Mr Brown confirming his conversation with Mr Lloyd. That email was set out in Annexure 1 to his statement and reads as follows: Have had a conversation re Bob upgrading his vehicle. He wasn't overly receptive however I have advised him that this is the direction we are headed and gave him the "benefit" of taking the weekend to research his financial position etc re the new purchase and have advised him to come back to me on Monday with a decision either way. If Bob comes back on Monday and does not want to proceed we will then formalise the procedure enforcing the terms of his contract. 49Further, on 21 May 2010 Mr Littlewood set out the formal request for Mr Lloyd to upgrade his vehicle consistent with the terms of the General Carriers Contract Determination: In confirmation of recent discussions regarding your current vehicle with an 8 tonne/12 pallet carrying capacity, please note that due to the changing scope and nature of the transport/freight industry we now request that you upgrade your vehicle to allow for a greater carrying capacity to a minimum of 12 tonne/12 pallet configuration. As Toll SPD is the "principle contractor" as per the terms set out in the "General Carriers Contract Determination" (clause 19, paragraph 6) we are obliged to offer you one months notice from the date of this letter to act on the above request. If you would like any assistance with regard to vehicle type and or specifications please feel free to discuss this matter with your direct line manager. Your early attention to the above is kindly appreciated. 50Shortly after sending the letter to Mr Lloyd on 21 May 2010, Mr Littlewood met with Mr Martin and Mr James Robinson, New South Wales Operations Manager to discuss the direction given to Mr Lloyd. During the course of that meeting Mr Martin suggested Toll may have an issue with Mr Lloyd and proposed to talk to him to establish what he wanted to do moving forward. Mr Littlewood's involvement with the issue ceased at that time when Mr Leach returned from annual leave. 51In cross-examination, Mr Littlewood explained that Mr Lloyd's vehicle had an eight tonne capacity with 12 available pallet spaces. That configuration meant that if Toll was required to collect an eight pallet consignment with each pallet weighing one tonne, the carrying capacity of Mr Lloyd's vehicle would not enable any further freight to be taken and Toll would be left with 4 pallet spaces which could not be filled with available freight. The practical effect of Mr Lloyd's vehicle was that Toll had to reshuffle the run or send someone from another area to collect the additional pallets that Mr Lloyd was unable to load. 52It was Mr Littlewood's evidence that during the course of his meetings with Mr Lloyd, Mr Lloyd did not raise his intentions or desire to retire. He also confirmed that at the time of his discussions with Mr Lloyd, Mr Lloyd's vehicle was the only eight tonne vehicle within the Toll fleet. Mr Aaron Leach 53Mr Leach is employed by Toll as the Road Operations Manager, New South Wales and has been employed with Toll since June 2006. 54Mr Leach deposed that upon returning from annual leave in late May 2010, Mr Littlewood had advised him that he had issued a letter dated 21 May 2010 to Mr Lloyd concerning the capacity issues of his vehicle. In particular the capacity issues concerned the times when Mr Lloyd had not been able to fully complete jobs as the loads proposed were beyond the capacity of his vehicle. The practical effect of this was that Mr Lloyd would have to perform two trips or another vehicle would be utilised to collect the remaining freight. 55In or around June 2010, Mr Leach met with Mr Lloyd and Mr Scott-Bell concerning the vehicle issue. During the course of that meeting he recalled the following conversation ensued: Lloyd: I am retiring in 12 month's time, can't you let me drive my truck till then rather than having to buy a new one? Leach: I'm not in a position to agree, I'll take it up with senior management and get back to you. 56It was Mr Leach's evidence that Toll thought well of Mr Lloyd and despite the difficulty such a decision could cause, decided to allow Mr Lloyd to continue to drive his eight tonne vehicle as he was retiring in 12 months time, that is in or around May/June 2011. Mr Leach also deposed that Mr Scott-Bell occasionally approached him seeking a letter to formally rescind the correspondence dated 21 May 2010 directing Mr Lloyd to upgrade his vehicle. Mr Leach stated his usual reply was to the effect "I'll have to see what I can do." 57During the course of a meeting in mid June 2011 with Mr Lloyd and Mr Scott-Bell, Mr Scott-Bell requested a further six month extension to Mr Lloyd's engagement on the grounds that he wanted to work until Christmas and would then retire. Mr Leach took the request to Toll management and later advised Mr Lloyd and Mr Scott-Bell that Toll could not accommodate a further extension due to the restrictive weight limit of the vehicle. Mr Scott-Bell subsequently suggested that Mr Lloyd should be able to undertake "the Wrigley's work." 58In late June 2011, Mr Leach attended a meeting with Mr Brown and Mr Scott-Bell where the request was made to extend Mr Lloyd's engagement until Christmas 2011. Mr Leach recalled the following conversation ensued: Scott-Bell: Bob wants another 6 months extension. He wants to work until Christmas and retire in the New Year. Brown: We cannot sustain this. It has been 12 months already. Bob has two options, upgrade his truck or become an ad-hoc subcontractor in the new financial year. Scott-Bell: What about the Wrigley's work, Bob can do that? 59Following that meeting Mr Leach said he discussed the possibility of placing Mr Lloyd on the Wrigley's work with Mr Brown and subsequently recommended Toll could trial the arrangement. In late July 2011, Mr Leach advised both Mr Lloyd and Mr Scott-Bell that Mr Lloyd would be afforded a trial on the Wrigley's work and in that regard he recalled the following conversation ensued: Leach: We will trial you on the Wrigley's run, however you will need to undergo an initial induction on the customer requirements. If you do this work you will need to be available. Lloyd: I will be. 60It was Mr Leach's evidence that Mr Lloyd was inducted into the Wrigley's processes and performed the work for Wrigley's for approximately two weeks. During the intervening period a cost analysis and productivity improvement initiative took place between Toll and Wrigley's. It was identified that Wrigley's customers were increasing their consignment weights due to larger orders and varied delivery patterns. Accordingly, the analysis identified that it was not commercially sustainable for Toll and Wrigley's to continue this work utilising an eight tonne vehicle. 61On 10 August 2011, Mr Leach telephoned Mr Lloyd to advise him of changes regarding Wrigley's requirements and need for a larger vehicle. During the course of that conversation, Mr Lloyd asked whether any other work was available. In response, Mr Leach stated that Toll would use Mr Lloyd as and when suitable work became available but could not guarantee the availability of work given his vehicle's capacity. Toll's last payment for work performed by Mr Lloyd was an invoice for payment of work up to and including 11 August 2011. 62It was Mr Leach's evidence that Toll engaged Mr Lloyd for an additional 12 months partly for reasons related to industrial harmony and the fact that Mr Lloyd had informed management of his impending retirement in or around mid-2011. During the course of his evidence-in-chief, Mr Leach referred to a number of schedules set out under Attachment 1 to his witness statement. Mr Leach subsequently referred in some detail to those schedules to support the proposition that Toll's use of Mr Lloyd's vehicle represented an under-utilisation of that vehicle when compared to the use of a 12 tonne vehicle. 63In cross-examination, Mr Leach stated that work for Toys R Us and Plus Pack were generally light loads that could be delivered using Mr Lloyd's vehicle. With respect to Toys R Us, it was Mr Leach's evidence that Toll had used Mr Lloyd's vehicle to deliver Loscam pallets for their freight. It was not a daily run and although Toll retained the Toys R Us account he could not guarantee Mr Lloyd a day's work or two hours work because the work involved was irregular. 64Mr Leach was adamant that Mr Lloyd had sought a 12 month extension or reprieve not to upgrade his vehicle as he was retiring in 12 months time. In relation to the correspondence issued to Mr Lloyd on 21 May 2010, Mr Leach stated he had taken Mr Scott-Bell's concerns to Mr Brown and it had been decided that the letter would stand. He could not recall whether Toll had made any formal request to Mr Lloyd concerning the need to upgrade his vehicle during the 12 month reprieve period. 65With respect to the Wrigley's work, Mr Leach confirmed that whilst Toll initiated the consignment size review concerning the Wrigley's contract, the decision was ultimately made by Wrigley's to utilise a 12 tonne vehicle. He further stated that with Wrigley's product being gum, it was heavy and Wrigley's were able to pack up to a tonne of product per pallet which made delivery more efficient and cost effective in a 12 tonne vehicle. Submissions Applicant 66Mr Lloyd is 71 years of age and has not worked for a period of time. Mr Guy contended the relationship between the parties would make reinstatement impracticable and in the event the Commission ruled in favour of the Union's application, Mr Lloyd should be awarded 26 weeks compensation calculated at the rate of $2,029 per week. 67Mr Guy submitted that when he commenced the Wrigley's run, Mr Lloyd was under the impression that the work would continue as a "stop-gap measure" until December 2011. However, in reality the work lasted approximately one to two weeks. He was subsequently asked to return to the Toll yard and was not given any further work beyond early August 2011. Mr Guy contended Mr Lloyd's "termination" was harsh, unjust, unreasonable and he was not afforded procedural fairness. 68In assessing this application, Mr Guy submitted the Commission was entitled to take into consideration those matters relied upon under Chapter 2 - Part 6 - Unfair Dismissals of the Act: Cherry v Allied Express Transport (1997) 73 IR 305. 69Mr Guy submitted that Toll had accommodated Mr Lloyd's situation since May 2010 when it verbally rescinded the request for him to upgrade his vehicle in correspondence dated 21 May 2010. A year later in June 2011, Toll had accommodated Mr Lloyd by retraining him and providing alternative work on the "Wrigley's run." Further, when Mr Lloyd was moved back to the Toll yard shortly after his first week of work with Wrigley's, he was under the impression that work in some form or another would be forthcoming. Mr Lloyd was further under the impression that his engagement with Toll would continue, as advised by his Union delegate Mr Scott-Bell, that Toll management would contact him when he was required for work. 70Mr Guy submitted that following an extensive period with little or no work, the Union filed a dispute notification (IRC 1541 of 2011) on 26 September 2011 in an attempt to settle the matter. On 6 October 2011, Connor C convened a second conciliation conference where Mr Matthew Low, Toll's Human Resources Manager, advised the Commission that Mr Lloyd had been terminated. However, during the course of this hearing, no reasons for Mr Lloyd's dismissal were given. Mr Guy also contended that any reason provided by Toll subsequent to Mr Lloyd's dismissal would need to be judged against the fact that no valid reason was given to him on the termination of his engagement by Toll. 71Mr Guy agreed there was no "valid" reason for Mr Lloyd's dismissal and contended Mr Lloyd's dismissal was harsh on the following grounds: (1)he is without a permanent job and is 71 years of age; (2)he has worked for Toll or their successors for more than 20 years without incident; (3)he has been unable to find suitable work since early August 2011; and (4)he was not informed of the reasons for his termination until the conciliation conference before Connor C on 6 October 2011. 72The Union argued that between 8 August and 6 October 2011, Toll provided no indication to Mr Lloyd concerning the status of his contract of carriage. Mr Lloyd's contract of carriage was terminated during the proceedings before the Commission on 6 October 2011. He was under the impression that his contract would be ongoing and expected to be provided with work in the future. 73Mr Guy submitted procedural fairness was paramount in examining whether the termination was harsh, unjust or unreasonable; Antonakopoulos v State Bank of NSW (1999) 91 IR 385; Humphries v Cootamundra Ex-Services and Citizens' Memorial Club Ltd (2003) 128 IR 37. 74Mr Guy argued the Commission should award Mr Lloyd compensation. Mr Guy confirmed that Mr Lloyd had not sought to mitigate his loss since his dismissal from Toll also confirmed that since the last hearing of this matter on 6 June 2013, he had not sought any alternative work. Mr Guy did however indicate to the Commission that this was due to some pressing medical conditions incurred by Mr Lloyd in July 2012. Respondent 75Mr O'Sullivan submitted that Toll engaged Mr Lloyd to provide transportation services to Toll pursuant to the contract of carriage. In or around April 2010, Toll identified a need for Mr Lloyd to upgrade his vehicle from an eight tonne to 12 tonne vehicle to meet the operational requirements of Toll's customers. On 30 April 2010, Mr Littlewood met with Mr Lloyd to inform him of the need to increase the capacity of his vehicle to 12 tonnes and explained to him the reasons why that upgrade was required. On 21 May 2010, Toll issued Mr Lloyd with a notice pursuant to Clause 19 of the Transport Industry - General Carriers Contract Determination requiring him to upgrade his vehicle to a 12 tonne capacity. In June 2010, Mr Lloyd met with Mr Leach where he stated he proposed to retire in 12 months and against that backdrop made the request that he be given a reprieve from the requirement to upgrade his vehicle prior to retirement. Toll subsequently agreed not to enforce the requirement for Mr Lloyd to upgrade his vehicle on the basis that he was retiring in 12 months time. 76In June 2011, Mr Leach met with Mr Lloyd and Mr Scott-Bell where Mr Scott-Bell requested an extension for six months as Mr Lloyd now wished to retire at the end of the year. During a meeting in late June 2011, Mr Lloyd was informed that Toll could no longer sustain him utilising an eight tonne vehicle and he would either have to upgrade to a 12 tonne vehicle or become an ad-hoc contractor. At the time Mr Lloyd suggested he be given the opportunity to work on the Wrigley's contract. Toll agreed to this request and placed Mr Lloyd on a trial performing the work using his eight tonne vehicle. Mr Lloyd commenced working the Wrigley's run in or around mid to late July 2011 and performed that work for approximately one to two weeks. 77On 9 August 2011, Wrigley's requested Toll to commence utilising 12 tonne vehicles for the delivery of their products following a cost analysis. On 10 August 2011, Mr Leach informed Mr Lloyd that Wrigley's had decided to utilise 12 tonne vehicles. He further informed Mr Lloyd that if there was suitable work available he may be provided with further ad-hoc work but there could be no guarantee given the limited capacity of his vehicle. 78It was Mr O'Sullivan's submission that the evidence was quite unequivocal and supported the proposition that there was a requirement for Toll in or around mid-2010 to have a fleet of 12 tonne vehicles. A principle objective of the introduction of 12 tonne vehicles was that they could provide productivity improvements for Toll's customers. 79Mr O'Sullivan submitted that the applicant bears the onus of proof in persuading the Commission that Mr Lloyd's termination was unfair, unjust and unreasonable. 80Mr O'Sullivan submitted the effective date of Mr Lloyd's termination was 6 August 2011 and the ad-hoc work agreed to at the time by Toll did not constitute the continuation of the contract of carriage: Thomas Arthur and Jeanette Ann Gaddess by AJ Mills v Sons trading as Mills Transport [1999] NSWIRComm 297. 81Mr O'Sullivan submitted the Commission should determine Mr Lloyd had been afforded a "fair go all round" and Toll's conduct in the circumstances was not harsh, unjust or unreasonable. Toll had a sound basis for the requirement to upgrade its fleet to 12 tonne vehicles and had given Mr Lloyd a 12 month period of grace from upgrading his vehicle on the basis that he proposed to retire. Mr Lloyd later sought a further extension of six months to December 2011. However, Toll was unable to agree to that proposition but agreed to provide him work on the Wrigley's contract which unfortunately ceased following a decision by Wrigley's to require 12 tonne vehicles to deliver products to customers. 82Mr O'Sullivan noted that Mr Lloyd had made no attempts to mitigate his loss and seek alternative work since August 2011. Consideration and Finding 83This matter concerned an application filed by the the Union on behalf of Mr Lloyd, a sole trader, against Toll pursuant to s 314 of the Act. The application primarily sought: ... reinstatement along with compensation for loss of income between date of termination and date of reinstatement calculated at $2029.00 per week; or in the alternative: that Toll Pty Ltd pay Mr Robert Lloyd $52,755 representing 26 weeks' compensation calculated at $2029.00 per week. 84Mr Lloyd is 71 years of age and has not sought alternative work since his contract of carriage with Toll was terminated in August 2011. The primary remedy under Chapter 6 - Part 2 - Contract Determinations is reinstatement. During the course of the hearing, the Union argued that given Mr Lloyd's age and the effluxion of time since August 2011, reinstatement was not practicable and compensation amounting to 26 weeks remuneration was the appropriate remedy. 85The evidence in this matter was that Toll had no performance or disciplinary issues with Mr Lloyd in the performance of the contract of carriage over a long period of time. 86The consistent approach of the Commission in dealing with a termination of a contract of carriage application has been to apply the same principles as those that apply when considering an application for reinstatement of an employee who makes an application for unfair dismissal under s84 of the Act: Deltec International Courier Pty Limited v Transport Workers' Union of Australia, New South Wales Branch (1993) 50 IR 341 and Cherry v Allied Express Transport (1997) 73 IR 305. It therefore follows that in determining whether a termination of a contract of carriage was unfair, the Commission is required to determine whether that termination was harsh, unjust or unreasonable. The Legislation 87Section 314 of the Act relevantly provides: 314 Jurisdiction with respect to reinstatement of contracts (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. (2) Reinstatement of a contract includes re-engagement under a similar contract. (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. (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. (6) A contract determination under this section takes effect when it is made, and is not required to have a specified term or to be published on the NSW industrial relations website. 88The Union contends Toll did not afford Mr Lloyd procedural fairness. In the context of this application, procedural fairness entitles a contractor to be given an opportunity to respond to any adverse contract variation including termination of the contract of carriage. In considering whether Mr Lloyd was afforded procedural fairness by Toll, the Commission is required to take into account the statutory basis for considering procedural issues and whether the termination was either harsh or unjust or unreasonable. 89In Outboard World Pty Limited T/as Budget Waste Control (Sydney) v Muir (1993) 51 IR 167 at 183, the Full Bench observed: We take this view because, even though there may be some circularity in the full phrase 'harsh, unreasonable or unjust', we detect scope for variation of meaning which may be critical to the determination of a particular matter and may be obscured by the use of the substitute term "unfair". Different but not wholly dissimilar words, "unfair", "harsh", and "unconscionable", are used in s275, power of the Industrial Court to Declare Certain Contracts Void, of the 1991 Act. In relation to those words, then appearing in s88F of the 1940 Act, the Commission in Court Session (Perrignon, Cahill and Dey JJ) in A & M Thompson Pty Ltd v Total Australia Ltd [1980] AR (NSW) 399 at 418 Cahill J (delivering a separate judgment) said: The duty of the Commission is to reach a conclusion on the issues of whether the subject transaction is 'unfair', or 'harsh' or 'unconscionable'. It has been said that those words are a 'tautological trinity' (Davis v General Transport Development Pty Ltd) [1967] AR 371) but we prefer to take the view that there is a perceptible difference between the meaning of the term 'unfair' and that of the terms 'harsh' and 'unconscionable'. What is unfair may not be so unfair as to be 'harsh'. But, whether this view be correct or not, once the transaction is found to be unfair the Commission may proceed to exercise its very wide power. In much the same way, we consider that, while strict definitions of 'harsh', 'unreasonable' and 'unjust' may produce a degree of circularity of meaning, turning on the notion of 'fairness', it may be in a given case that a dismissal may be viewed as coming within the ambit of one of the three adjectives but not the others. To avoid the possibility of misunderstanding or error, the tribunal, when making that primary finding, should state explicitly the basis on which it is made. 90In Byrne & Anor v Australian Airlines Limited [1995] HCA 24, the High Court dealt with an award provision that prohibited "harsh, unreasonable or unjust dismissal". The joint judgment of McHugh and Gummow JJ observed at [135]: Procedures adopted in carrying out the termination might properly be taken into account in determining whether the termination thus produced was harsh, unjust or unreasonable. 91Toll formally advised Mr Lloyd that he was required to upgrade his vehicle from 8 tonnes to 12 tonnes on 21 May, 2010. Shortly thereafter following Union representations by Mr Martin and Mr Scott-Bell, Toll agreed to a 12 month moratorium on the grounds that Mr Lloyd proposed to retire in or around 30 June 2011. However, in late May or early June 2011, he asked Mr Scott-Bell to seek a further extension to December 2011. Mr Lloyd was aware of Toll's customer requirements and was on notice to provide a 12 tonne vehicle for almost 15 months prior to the termination of his contract of carriage with Toll in August 2011. 92Shortly stated, the evidence pressed by Toll is to be preferred where it conflicts with that of Mr Lloyd. Mr Lloyd's contention that he did not tell Toll that he proposed to retire in or around late May 2011 is not made out on the evidence. The consistent theme of Toll's evidence was that he proposed to retire. On the balance of probabilities, I am comfortably satisfied that was the case. 93Mr Lloyd's "impression" that he expected ongoing work after the Wrigley's worked ceased and that he was unaware Toll had terminated his contract of carriage in August 2011 prior to the dispute proceedings before Connor C in October 2011, whilst unfortunate, cannot on the evidence before the Commission substantiate the charge that in all the circumstances of this particular case, he was not afforded procedural fairness. 94It was not Toll's responsibility to make the necessary enquiries at the time to ensure Mr Lloyd understood the practical effect of not complying with Toll's written notice requiring him to upgrade his vehicle to suit the new and emerging operational requirements of Toll's business. 95Having carefully reviewed and considered all of the evidence and submissions put by the parties in this matter, I find that the termination of Mr Lloyd's contract of carriage was not harsh, unjust or unreasonable. I further determine that Toll has afforded Mr Lloyd "a fair go all round" and has acted reasonably in the face of the changing operational requirements of its business. The application must be dismissed. I so determine. JD Stanton 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: 19 September 2013