Industrial Relations Commission New South Wales Medium Neutral Citation: Upshot Pty Ltd. v Veolia Environmental Services (Australia) Pty Ltd [2017] NSWIRComm 1011 Hearing dates: Dealt with on the papers Date of orders: 22 March 2017 Decision date: 22 March 2017 Jurisdiction: Industrial Relations Commission Before: Stanton C Decision: Application dismissed Catchwords: Breach of contract - payment - applicant terminated 21 September 2012 - claim for severance payment - principles of statutory construction - statutory framework - no claim for reinstatement - Commission unable to determine whether reinstatement impractical pursuant to s314 (4) - no jurisdiction - application dismissed Cases Cited: Australian Education Union v Department of Education and Children's Services [2012] HCA 3; 248 CLR 1 and Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32, Public Service Association v Department of Education and Communities [2013] NSWIRComm 32 In Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross (Matter No S417/2011) [2012] HCA 56; (2012) 248 CLR 378 Transport Workers Union of NSW v Veolia Environmental Services (Association) Pty Ltd [2015] NSWIRComm 1009 Category: Principal judgment Parties: Up Shot Pty Ltd (Applicant) Veolia Environmental Services (Australia) Pty Ltd (Respondent) Representation: Mr A Guy (Transport Workers' Union of NSW) (Applicant) Mr A Gooch, Solicitor (Respondent) Solicitors: M&K Lawyers Group Pty Ltd (Respondent) File Number(s): 2016/143289 Judgment 1. This matter concerns an application pursuant to s314 of the Industrial Relations Act 1996 (the Act) by the Transport Workers' Union of New South Wales (the Union) on behalf of its member Mr Paul Darden, the proprietor of Up Shot Pty Ltd (the applicant) against Veolia Environmental Services Pty Ltd (the Respondent). 2. The remedy sought by the applicant is an order that the respondent pay the applicant the amount of $40,139.12 in accordance with the terms of the Transport Industry - Redundancy (State) Contract Determination, (Redundancy Determination) representing 20 weeks compensation. The applicant is over the age of 45 years. Background 1. The applicant's engagement with the respondent was covered by the terms of the Veolia Environmental Services Pty Ltd NSW Contract Carriers Agreement 2009 (the Agreement). The Determination also applied to the applicant's contract agreement at all relevant times. 2. The applicant was first engaged by a company known as Collex Waste Management Pty Ltd in October 1986. Collex merged with the respondent doing the course of 1991 giving the applicant some 27 years of service. 3. In or around 2006, the applicant purchased a six wheel cable vehicle at the request of the respondent. In or around 2010, the applicant contends the respondent began to prefer vehicles with a "hook lift system". 4. During the period 2010-2012, the respondent lost a number of Sydney Metropolitan contracts for its environmental services. 5. On 26 March 2012, the respondent informed the applicant that the cable body of his vehicle was detective. Given the age of his vehicle, the respondent required him to upgrade. In correspondence dated 12 April 2012, the respondent informed the applicant that it required the applicant to upgrade to a Volvo 8 wheel vehicle: The Company is of the view that the Cable body on your truck is not economically viable to repair and continue to maintain. You are the last subcontractor in the Commercial Services fleet to still be operating a cable truck. Over the past two years other subcontractors have purchased new vehicles and had their vehicles converted from Cable to Hooklift when trucks became unserviceable. It is a recommendation by the NSW Equipment Manager that the truck body be retired from service and you move into a Hooklift truck within the Commercial Services Bulk Business. As your truck is well over six years old Veolia would require you to replace your existing vehicle with a new vehicle. Veolia would then fit a new 22 TA Pal Lift Hook body, auto tarp and weighing system to your new vehicle. Veolia would propose to convert cable bins to hooklift bins where possible for you to be able to service current existing customers. The Company therefore gives notice to you under Clause 7 of the 2009 Agreement that it requires you to replace your existing vehicle with a suitable vehicle meeting the Company's specifications and enabling the services to be undertaken efficiently - being an 8 wheel Volvo vehicle. 1. As part of his consideration concerning the requirement to purchase a new vehicle, the applicant met with the respondent on 31 May 2014 to determine future work prospects for the purposes of arranging finance for a new vehicle. 2. Shortly stated, the respondent advised the applicant that the then current work situation was quiet and, it was likely to decrease before it increased. Accordingly, the applicant determined that given the expected foreseeable work situation, he would not be able to secure finance for a new vehicle. 3. On 21 June 2012, the respondent advised the applicant that given his refusal to upgrade to an eight wheel Volvo vehicle, he was in breach of clause 7 of the Agreement and pursuant to clause 14, the contract agreement would be terminated on three months' notice, with the applicant's last day of service being 21 September 2012. 4. The applicant claims that he is entitled to a severance payment of 20 weeks pay consistent with the provisions of Clause 6(i) of the Redundancy Determination, which relevantly states: … where a carrier is to be terminated for reasons arising from changes in production, program, organisation, structure or technology … the principal contractor shall pay the carrier the following severance pay … 1. The crux of the applicant's case for a severance payment was his contention that the contract was terminated "arising from" the respondent's decision to change the type of vehicles it required contractors to use to perform their work. 2. The applicant further contends that in the event that he had been permitted to purchase a new vehicle, the contract would have continued. Accordingly, the respondent's requirement for a new type of vehicle essentially resulted in the termination of the contract. 3. The respondent has refused to pay the applicant a severance payment in accordance with the terms of the Redundancy Determination. 4. The respondent contends the applicant's claim for a severance payment pursuant to the Redundancy Determination is misconceived on the grounds that the termination of the applicant's contract was not made as a consequence of any decision by the respondent "to introduce major changes in production, program, organisation, structure or technology" with the meaning of the Determination. 5. The respondent referred to a decision of Commissioner Newall is Transport Workers' Union of NSW v Veolia Environmental Services (Association) Pty Ltd [2015] NSWIRComm 1009 where an application for declaratory relief was made with respect to the respondent's failure to make a severance payment to the applicant in accordance with the terms of the Redundancy Determination. Newall C declined to make the orders sought by the Union and subsequently dismissed the proceedings. 6. It was the respondent's case that the Commission had no power to hear and determine the applicant's claim for a severance payment brought pursuant to s314 of the Act. In any event it is the applicant who bears the onus of establishing that the Commission has jurisdiction to deal with the matter pursuant to s314 of the Act. 7. The respondent maintains that s314 of the Act is primarily concerned with the reinstatement of a contract that has been terminated. That purpose can be readily distinguished from this application where the applicant does not seek reinstatement. Instead, the applicant simply seeks a redundancy payment of 20 week's pay pursuant to clause 6(i)(b) of the Redundancy Determination. The applicant was over 45 years of age at the time the contract was terminated. 8. Moreover, the applicant contends that the contract was validly terminated as required by s314(1) of the Act. However, no previous application in support of the applicant's reinstatement with the respondent had been made notwithstanding the fact that the applicant's contract was terminated on 21 September 2012. 9. The respondent submitted that s314(4) of the Act provides that the Commission may only order compensation payable in circumstances where it considers reinstatement impractical. 10. The respondent also submitted that by seeking a determination by the Commission in accordance with the provisions of the Redundancy Determination, the applicant is also seeking to circumvent the acceptable alternative work provisions set out in clause 6(iii) therein. 11. It was the respondent's case that should the applicant consider that he has been under paid, an application for recovery pursuant to s365 of the Act was the appropriate course to follow in the circumstances of this particular case Shortly stated, the applicant has sought to circumvent the procedures for recovery of an amount applicable under an industrial instrument. Consideration In Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross (Matter No S417/2011) [2012] HCA 56; (2012) 248 CLR 378, Australian Education Union v Department of Education and Children's Services [2012] HCA 3; 248 CLR 1 and Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32, the High Court determined what it considers to be the proper approach to statutory construction. Those principles discussed by the High Court were encapsulated by the Full Bench in Public Service Association v Department of Education and Communities [2013] NSWIRComm 32 at [24]: [24] There are three recent High Court authorities which provide guidance as to the correct approach to statutory interpretation, namely, Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Thelander [2012] HCA 56; (2012) 293 ALR 412, Australian Education Union v Department of Education and Children's Services[2012] HCA 3;(2012) 285 ALR 27 and Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32. Key principles, relevant to the present proceedings, can be distilled from these authorities: (1) The legal meaning of a provision of a statute is to be ascertained by processes of statutory construction: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J. Thus, the fundamental object of statutory construction is to ascertain legislative intention: Certain Lloyd's Underwriters at [88] per Kiefel J. However, the use of the metaphor 'legislative intention' must not mislead. This expression must be understood as the intention that the courts will impute to the legislature by a process of construction: Certain Lloyd's Underwriters at [88] per Kiefel J. The duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J (applying Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; (1998) 72 ALJR 841; (1998) 153 ALR 490 at [78] per McHugh, Gummow, Kirby and Hayne JJ); (2) Ordinarily, the legal meaning of a provision of a statute will correspond with the grammatical meaning, but not always: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J and at [68] per Crennan and Bell JJ (applying Project Blue Sky at [78] per McHugh, Gummow, Kirby and Hayne JJ). Nonetheless, the process of statutory construction must begin with a textual analysis of the words of a provision - that is, a consideration of the ordinary and grammatical meaning of the words: Australian Education Union at [26] per French CJ, Hayne, Kiefel and Bell JJ; Barclay at [41] per French CJ, Crennan, Gummow and Hayne JJ; Certain Lloyd's Underwriters at [23] per French CJ and Hayne J. Although that initial step may involve the construction of the words of a provision in question when read in the context of the statute as a whole: Certain Lloyd's Underwriters at [88] per Kiefel J. Thus, the legal meaning is ascertained by reference to the language of the statute viewed as a whole: Certain Lloyd's Underwriters at [26] per French CJ and Hayne J and [88] per Kiefel J. The purpose of the statute resides in its text and structure: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J; (3) Context may also be considered "in a broader sense as including the general purpose and policy of the legislation, in particular the mischief to which the statute is directed and which the legislature intended to remedy.":Certain Lloyd's Underwriters at [88] per Kiefel J; (4) The context and purpose of a provision are important to its proper construction. Legal meaning may be ascertained by reference to general purpose, consistency and fairness: Certain Lloyd's Underwriters at [24] per French CJ and Hayne J; (5) The determination of the purpose of a statute or a particular statutory provision may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, if appropriate, reference to extrinsic materials: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J. Whilst consideration of extrinsic materials should not displace the clear meaning of the text of a provision, the purpose of a provision may be elucidated by appropriate reference to them: Certain Lloyd's Underwriters at [70] per Crennan and Bell JJ; (6) It is conceivable that the context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with their literal or grammatical meaning: Certain Lloyd's Underwriters at [68] per Crennan and Bell JJ quoting Project Blue Sky at [78] per McHugh, Gummow, Kirby and Hayne JJ; (7) Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted: Certain Lloyd's Underwriters at [25] - [26] per French CJ and Hayne J and [70] per Crennan and Bell JJ. In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose: Australian Education Union at [27] - [28] per French CJ, Hayne, Kiefel and Bell JJ. 1. I have considered the abovementioned principles in determining this matter: Statutory Framework 1. Sections 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. 1. Section 314 (1) of the Act empowers the Commission to make a contract determination with respect to reinstatement. A provision in identical terms to s 314(1) was set out in s 680(3) of the former Industrial Relations Act 1991. In Deltec International Courier Pty Limited v Transport Workers' Union of Australia, New South Wales Branch (1993) 50 IR 341 at 349, the Full Bench made the following observations concerning the operation of the then s 680 of the former Act: The first thing to observe about the sub-section is that it enables the Commission to make a contract determination referable to a contract of carriage "that has terminated": and to grant relief "with respect to the reinstatement" of that contract. The sub-section is thus concerned, in its terms, with relief against contracts which have come to an end for whatever reason, termination by the principal contractor or by the carrier or by the effluxion of time or by operation of law, and where there may or may not be cause for terminating the contract, and the relief provided is a determination with respect to the reinstatement of the contract. In other words, the sub-section is not concerned with the concept of dismissal as in an employment relationship and which is catered for now in Pt 8 of Ch 3 of the Act, or previously by s 20A and other relevant provisions in the former Industrial Arbitration Act, where the remedies of reinstatement, re-employment and compensation for lost wages are available. Here, there is the single remedy of a determination with respect to the reinstatement of a contract of carriage between a principal contractor and a carrier, not, we emphasise, concern with some concept of re-engagement or the re-making of a contract of carriage comparable to the re-employment of an employee. 1. Jurisdiction pursuant to s314 is enlivened on the grounds that the respondent has terminated the contract. There is a jurisdictional requirement that the applicant must elect to seek reinstatement. It is only in circumstances where the Commission considers that reinstatement is not practical that it may order compensation. In the particular circumstances of this case, I am prevented from determining the impracticality of reinstatement on the grounds that the applicant has not sought reinstatement. It must follow that I have not been able to test the circumstances of this case to support a determination that reinstatement is impractical, which is the "trigger" for the Commission to consider whether compensation is warranted. There is no jurisdiction for the Commission to determine the applicant's claim. 2. Moreover, there is no arbitrary scale for compensation. Rather, compensation is determined by the Commission independently following an assessment having regard to all the circumstances of a particular case including mitigation. 3. Having considered all the material filed by the parties in this matter, I have determined that the application should be dismissed. I so order. J D 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: 22 March 2017