Industrial Relations Commission New South Wales Medium Neutral Citation: Jalisco Holdings Pty Ltd v Staples Australia Pty Ltd [2018] NSWIRComm 1031 Hearing dates: 3 August 20164 August 20165 August 201625 August 20168 September 2016 Date of orders: 18 May 2018 Decision date: 18 May 2018 Jurisdiction: Industrial Relations Commission Before: Tabbaa C AM Decision: Staples Australia Pty Ltd shall pay to Mr Richard Ding a sum equivalent to five weeks' pay calculated on the basis of the weekly wage allocated to him by Jalisco Holdings Pty Ltd. The payment is to be made within 14 days of today's date. Catchwords: Section 314-Reinstatement of contract-Agreement negotiated collectively but entered into individually by the owner drivers-Agreement for 3-year term-During its currency grievances raised in relation to wrong routes and residential deliveries-wrong routes issues parked until 4th quarter of 2016-Respondent agreed to negotiate new Agreements if issue of rates paid for residential deliveries is pursued-Withdrawal of transportation services over 3 days-four text messages sent by the respondent advising of material breach of the Agreement and seeking a return to work-Termination of the Agreements-Return to work by 33 of the 42 drivers on individual agreements-Ding did not take up the offer to contact the respondent to arrange an interview to discuss a new contract-The respondent did not contact Ding as it did some other drivers to invite him to an interview despite his lengthy service-Application for compensation-Material breach of agreement-2 weeks' notice required for termination-termination unfair-3 weeks' pay-both calculated on the sum the driver allocated to himself as wages from his company. Legislation Cited: Industrial Relations Act 1996 (NSW) Cases Cited: Cherry v Allied Express Transport 73 IR 305; Re Federated Storemen & Packers Union of Australia, NSW branch (1987) 22 IR 198 Re Transport Workers' Union (NSW) v Toll Transport Pty Ltd (2015) 253 IR 262 Shop, Distributive and Allied Employees' Association v Wollongong UniCentre Limited [2005] NSWIRComm 1138 AWU v BHP Steel [2004] NSWIRComm 1045 Transport Workers' Union of NSW (on behalf of TWS NSW Pty Ltd and Ready Transport) v Smartskip (NSW) Pty Ltd [2008] NSWIRComm 55 D & R Commercial v Flood Jones v Dunkel (1959) 101 CLR 298 R v Commonwealth Court of Conciliation and Arbitration; Ex parte BHP Co Ltd (1909) 8 CLR 419 Transport Workers' Union (NSW) v Robar Enterprises Pty Ltd (2013) 238 IR 84 D & R Commercial Pty Ltd v Flood (2002) 113 IR 44 Category: Principal judgment Parties: Jalisco Holdings Pty Ltd - Applicant Staples Australia Pty Ltd – Respondent Representation: Counsel: M Gibian (Applicant) Mr P Brown Baker & McKenzie, Solicitors (Respondent) File Number(s): 2016/155569 DECISION Background 1. Mr Richard Ding (the terminated driver) commenced employment with Macquarie Stationary working at the warehouse in Erskine Park in or about October 1995. 2. In about 1996, Macquarie Stationary became Corporate Express with whom he worked as a Despatch employee until September 2000 when he resigned as an employee to take up an offer to work with the same company as a Contract Driver. That move entailed the establishment of a company, the purchase of a vehicle and provision of a mobile telephone. 3. He bought a Toyota Hi-Ace van and worked as a relief driver doing the City run until about 2001 when he was given a permanent run in the City. As the terminated driver was engaged to provide transport services to the respondent, the engagement was a contract of carriage for the purposes of s309 of the Industrial Relations Act 1996 (the Act). 4. Staples Australia Pty Limited (the respondent) is a large company that specialises in office stationary and supplies. It acquired Corporate Express in 2008 although it did not commence operating and serving customers under the Staples brand until October 2012. Also, in 2008, Mr Ding purchased a new 2008 model 2 Hino Pantch truck. In about 2014, he was transferred to the Kogarah run where he remained until his termination delivering parcels between St Peters and San Souci. 5. He was sole Director of Jalisco Holdings Pty Ltd. Apart from periods of leave, Mr Ding undertook all his own driving. 6. He recalled that he signed a new commercial contract every three years. The last 3-year agreement was signed on or about 1 May 2014. 7. The terminated driver is a member of the Transport Workers' Union of New South Wales (the TWU). 8. The terminated driver operated from the respondent's Erskine Park depot (the depot) where a fleet of approximately 47 owner drivers (the drivers) were based. The starting times for drivers were staggered. The drivers would commence at the depot at varying times between 2.00 am – 4.00 am, Monday to Friday (depending upon their preferences and the anticipated load for the day which could vary) and would finish their run once their deliveries were completed. Mr Ding commenced at 2.30 am and concluded his run around 2 pm. 9. In or about November 2015, he was advised, without prior consultation, that his start time was changed to 3.00 am which meant that he got the early morning traffic and that slowed him down for the rest of the day. 10. On a typical day, the drivers would, on arrival at the depot, scan the outgoing freight, load it into their vans and then set off to undertake the deliveries. The vast majority of customers were either small or large businesses. The bulk of the deliveries the drivers made were multiple boxes. There were also deliveries made to residential addresses. His customers were mainly businesses. 11. Mr Ding recalled that the despatch staff used to approve an extra payment of about $5 for delivery of oversize parcels but that ceased in early 2016. 12. It was not disputed that the list of transportation services provided by Mr Ding included, but was not limited to: * Loading; * Administration; * Return of goods; * Loading of vehicle; * Sorting of run; * Client and customer communication; * Manifesting and scanning either cartons or invoices; and * Delivery of items from the depot to the respondent's customers. 1. The practice at the depot was for the respondent and a Drivers' Committee (made up of elected representatives of the drivers) to collectively negotiate the terms of a pro forma Independent Contractor Agreement and then the drivers and the respondent would sign individual agreements reflecting that agreement. With a couple of exceptions, all the drivers were on the same or similar contracts with the same rates of pay and conditions and expiry date. There was also a practice whereby local variations on rates were agreed between the respondent and individual drivers. 2. It was not disputed that: * the latest Independent Contractor Agreement (the agreement) between the terminated carrier and the respondent, which was renewed in May 2014 and which was due to expire on 1 May 2017, was consistent with the standard agreement negotiated between the respondent and the Drivers' Committee; * the drivers signed an acknowledgement on or about 23 May 2014 as part of the negotiation/renegotiation of the agreement for transportation services. Mr Ding signed such an acknowledgement on 9 May 2014; * home deliveries were being performed prior to the negotiation of that agreement; * the issue of home deliveries was discussed during the negotiations that led to the 2014 agreement; * the per parcel rate had been agreed and was fixed for the 3-year term of the agreement; * the schedule of rates contained in the agreement provided for CPI adjustments. The rates were last adjusted in May 2015; * the respondent paid its drivers on a fortnightly basis an amount calculated with reference to the number of parcels delivered in accordance with the schedule, plus GST; and * prior to 22 April 2016, the rates in the schedule took into account the following: a. Ad hoc deliveries; b. Pallet rates; c. Standard parcel rates; d. Large item rates; and e. Cancellation/minimum fees. 1. The agreement also contained the following features: 1. There was no minimum level of services (clause 2.7 (a)); 2. The allocation of services would change in accordance with the needs of the respondent (clause 2.7 (b)); 3. Jalisco Holdings Pty Ltd would not acquire a right to any minimum level of services or preservation of any designated run, route, geographical area or client list (clause 2.7 (C)); 4. Jalisco Holdings Pty Ltd may be terminated prior to the agreement's expiry date (1 May 2017) in accordance with the express termination provisions set out in the agreement (clauses 4 & 5); 5. Jalisco Holdings Pty Ltd may not transfer, sign or sublease the agreement without the prior consent of the respondent (clause 11); and 6. The respondent would pay Jalisco Holdings Pty Ltd for each attempted delivery or pick up provided that the carrier followed all relevant delivery and/or pick-up directions (Schedule II). 1. Mr Ding could not recall when delivery to residential addresses commenced but he started noticing the difference in 2016 with the increase in use of an internet order option. Such deliveries were a problem to him because they involved diverting from his normal route, difficulty in contacting the customer and the unsatisfactory payment received for that service. 2. If the delivery was to an apartment and the customer was not home. He could not leave the parcel. 3. The Drivers' Committee had been in consultation with management on a range of issues, including an increase in home delivery services and concerns relating to the incorrect distribution of freight to the drivers. Both of those concerns, it was contended, affected the remuneration of the drivers. 4. The Drivers' Committee wrote to the respondent on 29 January 2015 advising that the drivers were not happy with the working conditions, including proposed charges for private addresses and wrong routes. 5. The Drivers' Committee met with management on 5 February 2015 at which time the committee members raised a few issues including wrong routes and deliveries to home addresses. 6. Mr Hugh Crowther, a member of the Drivers' Committee, contended that at a further meeting on 15 February 2015, management offered to pay $4 for the first carton in a home delivery. The offer was rejected as the quid pro quo required was a commitment from drivers to check their own papers from consolidated pallets on the dock which would have involved considerable extra time in the depot prior to commencing deliveries. 7. Further meetings were held between the parties up until early 2016. In January 2016, the Drivers' Committee escalated their grievances up to the TWU as the members felt that they were not progressing with their claims. The Drivers' Committee sought feedback from the drivers on a discussion paper it had circulated advising of changes in the market place that had impacted on their working week since the last contract period. Those matters included what were identified as two main issues affecting the drivers - private address deliveries and the increase in loading and delivery times. 8. On 9 and 16 March 2016, Mr Ian Sherwood, TWU organiser, emailed Darren Barlow, Transport Manager-NSW & ACT, seeking a meeting between management and a "Works Committee" to discuss those two issues. 9. All the drivers were on identical contracts that commenced and expired on the same dates except that approximately five had a variation in rates, generally due to a specific issue to do with the geographic area of their run. 10. There were two types of rates paid to drivers. In the main, drivers were paid a parcel rate of $2.08 per parcel or $1.16 per parcel for bulk deliveries (CPI adjusted). Bulk deliveries involved the delivery of more than 30 parcels to the same address. Some other drivers were paid at one rate for the first 150 parcels and a different rate thereafter. 11. If delivery was to a commercial address, it was likely that the driver would be delivering a reasonable number of parcels to the one address and would be paid a multiplication of the flat rate. The concern of the drivers was in respect to deliveries to a residential address which would involve one or two boxes for a remuneration of approximately two dollars per parcel. The concern of the drivers was that they were allegedly experiencing an increase in their utilisation to perform home deliveries and that was impacting on their earnings because of the time taken to perform such deliveries which, it was contended, could be anything from 15 – 30 minutes, depending on the address. If the resident was not home when the driver arrived, the driver sometimes would chance it and leave the parcel if the address was a house but could not chance it if the address was a unit. 12. Although the majority of the respondent's customers were commercial businesses, the respondent began to receive a greater demand for residential deliveries because of the increase, during 2015, in the promotion of its website, staples.com, which permitted customers to make purchases online and to have them delivered to a residential address. The promotion, it was contended, resulted in drivers being required to make 10-15 home deliveries per day. 13. The respondent's commercial clients were generally located in industrial or commercial areas. Those areas were serviced by streets designed for heavy vehicles and had designated loading zones. In addition, the businesses had loading docks as distinct from residential addresses which required drivers to park in side streets and walk to a one-off address. Mr Ding said he averaged six private addresses a day which averaged 1.5 hours to complete and for which he received $2.08 per delivery. 14. Mr Ding shared the other drivers' view therefore that the payment structure was unsuitable for home deliveries as, irrespective of the number of home deliveries they had, a payment of $2.08 per delivery was not a sustainable rate if a driver had a 20-minute round trip, off the standard run, to deliver to a residential address. 15. The incorrect addresses issue arose from the alleged errors which existed in the list of deliveries provided to the drivers in the morning resulting in them being given deliveries within the run of another driver. The drivers contended that they were required to expend, without additional remuneration, a substantial period undertaking the sorting of those incorrectly attributed deliveries. 16. The respondent and the Drivers' Committee met on 7 and 19 April 2016. On the latter occasion, the respondent advised that the contract remuneration rate provided to the drivers incorporated the extra time required by drivers to deal with those two matters. 17. The drivers held a series of meetings over the period 20 – 22 April 2016 outside the gate of the depot. They decided collectively not to provide transportation services throughout that period. The drivers wanted management to come out to the gate and speak to them about those issues. 18. Instead, management communicated by a series of four text messages to the individual drivers. The text messages had three themes – firstly, the drivers were in breach of their agreements; secondly, there was an invitation to return to work; and, thirdly, there was an offer to confer with any of the drivers if they wished to talk to Mr Barlow. Neither the drivers nor the TWU entered the depot to seek talks with management. 19. The respondent terminated the engagement of all the drivers by text message around 3.41 pm and, in some circumstances, by letter on 22 April 2016. 20. It was contended that prior to receipt of the termination notices, at approximately 1.51 pm, the Drivers' Committee communicated to the respondent that a return to work would occur at the normal time of 2.30 am on 26 April 2016, after the ANZAC Day long weekend. Normally no work was undertaken over the long weekend. 21. It was also contended that the TWU filed a dispute notification as management was issuing those termination notices. 22. Despite the terminations, the respondent contacted a select number of drivers over the long weekend inviting them to discuss the possibility of entering into a new contractual arrangement, by 4 pm on 25 April, to perform the same services that had been performed up to that time. The new contract arrangements did not address either of the two disputed matters. 23. The dispute was listed for compulsory conference before Newall C on Tuesday, 26 April 2016. Arising out of the conciliation attempts before Newall C was an invitation to drivers generally to arrange individual meetings with Mr Barlow. 24. Overall, around 41 of the drivers were offered a new contract to work under the same terms and conditions as they had previously been engaged. 25. What the respondent managed to achieve was a discontinuance of the collective arrangements and, instead, negotiations on individual arrangements with each of the selected drivers 26. The terminated carrier was one of several drivers who neither contacted, nor sought to contact, Mr Barlow with respect to the possibility of him and/or his company entering into a new contract. 27. The TWU contended on behalf of the terminated driver that in all the circumstances the termination was unfair. 28. The TWU filed on behalf of Jalisco Holdings Pty Ltd and 8 other drivers an application pursuant to s 314 of the Act seeking reinstatement of their contracts. Conciliation attempts before Newall C failed to settle the claim on 3 and 19 May 2016. 29. Agreement was reached between the parties on 29 July 2016 that the matters would be heard together with the evidence of Hugh Crowther and Richard Manning (Drivers' Committee), Ian Sherwood (TWU Organiser) and Darren Barlow (Transport Manager-NSW and ACT) being used as evidence in all the matters otherwise all the other drivers would provide evidence in their individual matters. The agreement was reached on the basis that there were several common elements across all the applications in relation to the facts and circumstances, particularly with respect to the critical period 20 - 22 April 2016. That was also the case in relation to the terms and conditions of their individual agreements for the provision of transportation services. 30. On 25 August 2016, the Commission was advised that the claim was not being pursued in relation to Bennett Freight Pty Ltd. Mr Sherwood was unable to attend for cross-examination for medical reasons. His statement was entered into evidence with the Union acknowledging the weight that would be given to any contested part of his statement. The Evidence 1. Richard Ding provided a statement in which he advised that he was the sole director of Jalisco Holdings Pty Ltd. Apart from periods of leave, he did all his own driving. 2. Mr Ding was on the run from St Peters to San Souci. If he was required to deliver a parcel to Earlwood, he would have to do a special trip to that suburb. On average, he delivered to six private residences per day which took approximately one and a half hours to complete delivery. He received $2.08 per delivery which, he stated. was clearly not sustainable. 3. Mr Darren Barlow has been Transport Manager, NSW and ACT at the Erskine Park site since 6 October 2009. He participated in the negotiations which led to agreements on the terms and conditions of the Independent Contractor agreements for drivers, including participation in conciliation conferences before the Industrial Relations Commission. He confirmed that the agreement entered into with Jalisco Holdings Pty Ltd was consistent with the standard agreement negotiated with all the drivers at that plant. 4. In practice, agreements were collectively negotiated between the Drivers' Committee and the respondent. Mr Richard Manning of R & M Logistics Pty Ltd, a contract carrier, successfully nominated for a position on the Drivers' Committee after the 2014 contract was negotiated. The other four members of the committee were Hugh Crowther, Michael Nobbs, Kassem Jaafar and Mark Harris. The Committee held monthly meetings with management to discuss general operating issues. 5. All the drivers were on agreements that commenced and expired on the same dates, at least in relation to the last two agreements that Mr Manning was aware of. Nevertheless, the drivers signed the agreement individually between their firm and the respondent. All agreements were the same as that negotiated by the Drivers' Committee except for approximately five agreements that had a variation in rates, generally due to a specific issue to do with the geographic area of their run. 6. Mr Manning recalled that the 2014 negotiations were difficult, and at times emotional, but no industrial action had been taken. The negotiations had resulted in a 3-year agreement being negotiated with an expiry date of 1 May 2017. 7. Mr Crowther was an owner driver operating Crowther Logistics Pty Ltd. as a sole director. He commenced a contractual engagement with Corporate Express on 1 September 2009. 8. Negotiations had already commenced during the 2014 round of negotiations when Mr Crowther was elected to the drivers' committee to take the place of the former union representative and committee member, Greg Edwards. 9. Mr Crowther agreed that the term of the agreement he signed was for 36 months to terminate on 1 May 2017 unless terminated by either party prior to its expiry date. He had signed three of those contracts and acknowledgements over the years with this respondent and its predecessor and each contract had a fixed term. 10. Mr Crowther confirmed, under cross-examination, that when he joined the Committee he was already on notice from the drivers regarding their concerns about home deliveries. Nevertheless, the parties reached agreement on the per parcel rates which were fixed for the 3-year term of the agreement, subject to annual CPI increases: BROWN: … And part of your role on the committee was to gather up the ideas and the concerns, and do I take it that one of the concerns that would've been live at that time was the fact that from December 2012 there was the issue of home deliveries? A: Yes. Q: So when you entered into these negotiations for the May 2014 agreement A: Uh-huh. Q: …. You were on notice of the concerns with respect to the drivers in relation to what is referred to as home deliveries, do you agree with that proposition? A: Yes. Q: And it's true, isn't it, that some of the drivers had some issues with the home deliveries, and in particular how much they were getting paid for the home deliveries? A: At that time that was not a big issue. Q: It was not a big issue, why was it not a big issue, sir? A: Because the frequency wasn't there, it was very rare….. Q: And the intent of the drivers' committee, and I'm only asking you this from the perspective of the drivers' committee, is that you wanted a degree of certainty as to the rates for the three year term, correct? A: Yes. Q: And therefore you locked in those rates knowing that they would be the rates for the three years of the term, correct? A: Yes. Q: And putting back your own hat on, you were happy enough to provide services under those rates? A: At the time of signing this, absolutely. Q: Yes, and do I take it, sir, from that comment, that at some stage you decided that you were not happy to provide services applying those rates? A: That's correct. Q: And do you want to tell this Commission when that occurred in your own mind, sir? A: With the increased frequency of home deliveries, for one, so once upon a time maybe done one or two a week, that's fine, but when it become four or five a day, or 15 a week, it become a real issue. I was also happy to provide those services at that cost while the boxes were at the size they were at the time I signed the contract. The boxes were increased in size, the boxes were increased in weight after that. That's another issue that wasn't brought up but we still provided that service. They also changed start times after this contract was signed, which also added cost to my business, so I've not got larger boxes, heavier boxes, later start times and an increased frequency in home single drop deliveries which were not there at the time of signing this contract…. COMMISSIONER: Was it gradual, was there a certain date when this happened? A: Okay, yes it was gradual. The first time home deliveries were raised as a concern, along with some of the other issues, was in a formal meeting in January 2015. 1. Mr Manning agreed that one of the outcomes of the May 2014 agreement was an agreed flat rate for the delivery of all parcels or cartons below a certain number. He also agreed that the flat rate was subject to CPI indexing. 2. Mr Manning recalled that one of the first duties of the Drivers' Committee following his election was to write to the respondent on 29 January 2015 to raise a number of important issues confronting drivers in practical ways. Despite meeting with management on multiple occasions, those issues – increase in home deliveries, the capacity to sell their runs, change to start times; and freight being incorrectly sorted – were not satisfactorily addressed. 3. In about February 2016, the Drivers' Committee prepared and distributed to the drivers and management a discussion paper titled "Staples Transport Contractors Discussion Paper". About 25 drivers met on Saturday morning, 27 February 2016, to discuss its contents in addition to those who gave telephone feedback. It was resolved that the Drivers' Committee obtain advice from the TWU prior to addressing the contents of the paper with management. 4. Mr Manning stated that Mr Sherwood, TWU Organiser, advised them to select the two most important issues to the drivers and focus on them in discussions with management. The two issues selected were home deliveries and wrong routes. Home Deliveries 1. For the three-year period prior to the meeting, home deliveries were being performed and compensated in accordance with the Schedule of Rates in the Agreement. There was no suggestion that Staples was not complying with the agreement as the number of home deliveries increased. 2. This issue affected some drivers more than others. It particularly impacted those drivers working in the suburbs. In the main, a home delivery was a one box delivery for which the driver was paid $2.08. Mr Manning estimated that if four deliveries were done in an hour, it would mean that the driver was working for $8.32 per hour. Mr Crowther estimated that if a driver had to attend at a residential address, he would have a 20-minute round trip, off the standard run, which would result in receipt of an unsustainable payment of $2.08 for that delivery. 3. Under re-examination, Mr Crowther explained that three new size boxes were introduced after the 2014 agreement was signed off on – two of which were larger than the existing ones. The previous C4 became known as the M4 and the new boxes were known as an A5, A6 and the maxi. That obviously reduced the box count and it also introduced some weight issues to the boxes. 4. Mr Crowther explained that, in relation to corporate clients or commercial buildings, they have loading docks or facilities that made it more convenient or expedited deliveries. The ability to use such loading docks to do a home delivery depended on the distance between that loading dock and the residential address and depended also on the relationship the driver had with the particular commercial premises. 5. Messrs Manning and Crowther conceded that, in the 3-year period prior to the meeting on 7 April 2016, home deliveries were being performed and compensated in accordance with the Schedule of Rates in the agreement. There was no suggestion that the respondent was not complying with the agreement. The drivers considered it to be a growth industry for the respondent as they were getting an increasing number of home deliveries and were seeking increased remuneration for such deliveries. A demand was made for an increase in the payment in circumstances where a driver was asked to perform a home delivery as those types of deliveries were taking longer to complete and the best the drivers could do was about four deliveries per hour. 6. In re­-examination, Mr Crowther agreed that the delivery to residential addresses was built into the rate they received but pointed out that it was not at the frequency it had become. It became multiples of deliveries instead of one or two boxes a day thereby shifting the business model. 7. It was a demand for more money in circumstances where a driver was asked to perform a home delivery as those types of deliveries were taking longer to complete and the best the drivers could do was about four deliveries per hour. 8. Mr Ding could not recall making any deliveries to residential addresses prior to the latter part of 2015 when he took on the Kogarah run. He confirmed, during cross-examination, that the contract stipulated that if a resident was not home, the driver would leave a calling card and would be paid for that failed delivery and again when the parcel was eventually delivered. Nevertheless, he argued that the respondent did not always pay for failed deliveries. Wrong Routes 1. Drivers were required to pick up their own freight and load it on their vehicles at the start of the day. There was an on-going problem with the information technology system that resulted in, from time to time, inaccurate information being included on the labels for the delivery of freight. The resultant effect was wrong freight pick up bay. When scanning and sorting their freight at the commencement of the shift, the drivers were required to identify "wrong routes" and ensure that such freight was given to the driver completing the appropriate run thereby adding time to the driver's day, particularly when there were large amounts of improperly allocated freight. That issue was an ongoing problem at the Erskine Park site. 2. It was time consuming and time wasting as drivers, it was estimated, could spend from between 45 minutes to an hour sorting out freight and getting it to the correct driver. It was a huge issue for drivers. Mr Crowther recalled that the issue of wrong routes had been raised in 2015 at which time Mr Barlow advised that the respondent was working on fixing the software so routes stayed assigned as per the master data list. Mr Crowther also recalled that he had responded at that time, "we first raised this more than 12 months ago, we know it has been a long outstanding issue….". 3. Mr Ding was personally affronted when the respondent ceased a year-long practice of remunerating him with a special rate for handling enormous boxes for Visy from China for supply to St George Hospital. In about November 2015, Mr Holmes advised him that the contract rate covered all "normal freight". 4. Mr Ding recalled that a few days' later, Mr Holmes came into the warehouse and advised him of a change to his start time to 3 am which meant that he got the early morning traffic and slowed down the rest of his day. 7 April 2016 Meeting 1. Mr Barlow met with the Drivers' Committee from time to time to discuss issues of concern to the drivers. He could not recall any meeting in 2016 prior to 7 April 2016. 2. A meeting was held on 7 April 2016 at which the following were in attendance: Mr Darren Barlow (Transport Manager-NSW & ACT), Stephen Holmes (Transport Supervisor), Cecilia Wang (legal representative of Staples), and the following members of the drivers committee – Hugh Crowther, Kassem Jaafar, Mark Harris, Richard Manning and Michael Nobbs. Mr Sherwood, TWU Official was also in attendance at the invitation of the Drivers' Committee. 3. Mr Manning opined that Mr Joe Taylor (Manager) declined to attend when management was advised that Mr Sherwood would be attending the meeting. 4. Mr Barlow recalled that the meeting proceeded on an informal basis. Mr Manning recalled that it was a cordial meeting. It was not disputed that two items were discussed at that meeting – home deliveries and wrong routes. 5. Messrs Manning and Crowther agreed with the contents of Mr Barlow's minutes of that meeting that, in relation to wrong routes: * Mr Barlow had responded that the respondent was investing money to update the software so routes stay assigned as per the master data list and that software would be installed by the fourth quarter 2016; and * The committee had asked the respondent to address the matter of wrong routes as soon as possible. They had advised that, as a committee, they were prepared to wait till the fourth quarter 2016 (November 2016) otherwise if it was not fixed, compensation would be sought. 1. Under cross-examination, Mr Manning agreed with the minutes of that meeting as produced by Mr Barlow in relation to the subject of home deliveries. The Drivers' Committee raised the following issues: * Home deliveries take longer to complete; * The best they can do is 4 per hour; * It takes time to look up the delivery address; * The deliveries normally have special instructions to call customers before making the delivery; * These deliveries were previously done by StarTrack prior to the new agreement being signed in 2013; and * Need this addressed ASAP 1. Mr Barlow stated that he was advised, at that meeting that the drivers wanted a minimum payment of $8 for each delivery to a residential address which would impact significantly on the respondent as it was a substantial change to the existing arrangements. He said that he undertook to consider and respond to their request. 2. In that regard, the respondent's representatives undertook to meet with the Drivers' Committee by the end of the following week to provide a response. 3. Messrs Manning and Crowther also agreed with the contents of Mr Barlow's minutes of that meeting that, in relation to wrong routes: * Mr Barlow had responded that the respondent was investing money to update the software so routes stay assigned as per the master data list and that software would be installed by the fourth quarter 2016; and * The committee had asked the respondent to address the matter of wrong routes as soon as possible. They advised that, as a committee, they were prepared to wait till the fourth quarter 2016 (November 2016) otherwise if it was not fixed, compensation would be sought. 1. Mr Crowther confirmed that there was no reference, at the meeting on 7 April 2016, of a threat of withdrawal of services. 19 April 2016 Meeting 1. The Drivers' Committee (except for Mr Harris) met with Messrs Barlow and Holmes at 4 am on Tuesday, 19 April 2016. Mr Barlow kept minutes of that meeting. Mr Barlow estimated that the meeting went for about 15 minutes during which he addressed the meeting on both issues. Mr Barlow's recollection of the following conversation was confirmed by Mr Manning, under cross-examination: Barlow: With respect to the wrong routes, we have invested over $400,000 fixing this but it's an IT fix and it will not be completely implemented and running until at least quarter four… But you've been paid (for home deliveries) under the rates schedule. You were doing home deliveries for six months before we negotiated the last agreement so I'm not in a position to now increase the minimum payment to $8.00 for any home delivery. If that's something that needs to be discussed in the future, then that's fine but I won't be increasing the minimum rate now. Manning: Well, could we then start contract negotiations as of now? Barlow: More than happy to sit down and negotiate new contracts if that's what you want but we would have to start afresh with a new contract and, if we both agreed, we could rip up the old ones. 1. Mr Barlow believed that he was entitled to consider the subject as closed following his consideration and rejection of the rate increase and in the absence of any further communications, emails or telephone calls from any of the drivers or their union. 2. Mr Crowther recollected that Mr Barlow advised the meeting words to the effect, "I have legal advice following our last meeting" before proceeding to read from a piece of paper he was holding in his hand "Wrong routes are built in to your rate, and once fixed, we should adjust the rate accordingly. As for home deliveries, they are built in to your rate. We were honest and open at the time of negotiation of the new contract that there would be home deliveries". 3. Mr Crowther also recollected saying to Mr Nobbs, "I don't know about you, but that sounded like "fuck you" before addressing Mr Barlow, "I'll go let the drivers know, but they won't like this". The meeting concluded on that note. 4. Under cross-examination, Messrs Manning and Crowther agreed with the minutes kept by Mr Barlow as to statements that were made at the meeting on 19 April 2016 in relation to wrong routes: * The company was working towards improving that issue by quarter 4 of 2016; * The problem had been occurring for the past decade and would be equal to 30 minutes per day per driver; * The company was investing over $400,000 to fix that issue and to improve the drivers lead times; * Legally, given that it was a long-term inefficiency, technically the parties could solve that issue and negotiate a lower carton rate; and * Staples management advised against that approach. 1. Messrs Crowther and Manning also agreed with the contents of the minutes kept by Mr Barlow in relation to home deliveries: * Staples contractors commencing delivering the .com orders in December 2012; * The company was open and honest about the fact that it was moving the home deliveries into its own fleet to increase the earnings of its contractors; * Legally, that service was built into the carton rate as per the schedule; * If the company paid a higher carton rate for staples.com, it would need to lower the normal carton rate; and * If any individual contractor wished to negotiate a higher or lower rate for home deliveries, the company would consider such request depending upon the volumes on each run. 1. The drivers were seeking to quadruple the rate negotiated in a 3-year agreement for a home delivery. Mr Manning explained that the respondent was charging the client $5.50 freight and paying the driver $2.08 plus GST. He noted that the staples.com orders were a fast-growing area of the business. The orders relating to deliveries to commercial addresses were not an issue. It was the small amount of orders relating to delivery to residential addresses that caused the problem. Mr Manning said that he was amazed that they could not arrive at an accommodation given the small amount of work involved in the dispute. He personally did not expect the respondent to accede to the $8 per delivery demand but the four deliveries per hour was used as a benchmark for negotiations as some drivers took longer than others and some drivers were affected more than others. 2. Mr Crowther confirmed that it was Mr Manning who had suggested a quadruple increase in the rate for a home delivery. He conceded that sometimes he did not have to go out of his way to deliver a parcel to a residential address and sometimes he had only one box to deliver to a corporate client. Nevertheless, the problem existed where the residential address was, say, 15 minutes away from the last drop and another 15 minutes away from the next drop: …. Corporate addresses tend to have loading docks, loading zones, that type of thing. Most of the guys drive around four a half, six and a half tonne trucks. These are not easy things to manoeuvre down residential streets where you can't even get a car up beside a car. And they've become more frequent. Not every driver was affected, right. City drivers, not so much, because you're right; you park in one location and you can walk most places. As you got further out into the suburbs, and not my run, some of the other guys, were really spending a lot of time delivering those things. 1. Mr Manning, under cross-examination, confirmed the following conversation with Mr Barlow as recounted in the latter's statement in the proceedings: BARLOW: But you've been paid (for home deliveries) under the rates schedule. You were doing home deliveries for six months before we negotiated the last agreement, so I'm not in a position to now increase the minimum payment to $8 for any home delivery. If that's something that needs to be discussed in the future, then that's fine, but I won't be increasing the minimum rate now. MANNING: Well, could we then start contract negotiations as of now? BARLOW: More than happy to sit down and negotiate new contracts if that's what you want but we'd have to start afresh with a new contract and, if we agree, we can then rip up the old ones. 1. Mr Manning recalled that the Drivers' Committee was advised that the present agreement rate for home deliveries would not alter. He confirmed that he personally was happy to re-negotiate the contract but pointed out that he was one voice amongst the collective. 2. Mr Crowther agreed that Mr Manning had suggested that the parties commence contract negotiations immediately and that Mr Barlow had agreed to commence negotiations for a new agreement to replace the current agreements. Mr Crowther recalled that he responded that the Drivers' Committee would relay that offer back to the drivers. 3. Mr Crowther confirmed that, once again, there was no reference, at the meeting on 19 April 2016, to a threat of withdrawal of services. 20 April 2016 stop work 1. Mr Manning and some other drivers usually arrived at work at about 2 am. On 20 April 2016, they waited outside the gate to the depot until all drivers (about 40 in number) arrived to hold a meeting to discuss the issues affecting them. Mr Manning recalled that a supervisor and Mr Holmes both came out to the gate to ask what was going on. He recalled a member of the Drivers' Committee saying words to the effect, "we're having a stop work meeting". No other members of management came out to talk to them by 10 am. 2. Mr Crowther confirmed that a meeting of drivers was held at 2.30 am to report on, and discuss, the outcome of the meeting with Mr Barlow the previous day. Under cross-examination, Mr Crowther stated that his briefing had been fairly emotional and started a conversation going amongst the drivers: As I've mentioned before, I told them I'd had enough, and that, I fed back the information from the meeting on the 19th, said, "We are hitting our head up against a brick wall here, we're getting nowhere, they don't care about the fact that all these changes cost us money and not them, and they're just putting us off again". So, I said, "That's it for me. I've been trying as a committee member to try to represent you guys; I've had enough; I'm going…. I can't remember the exact words but I spoke a fair bit over those three days. It would've been along the lines of "We're banging our heads up against a brick wall here. We've been trying to change, get a fairer deal on these issues, even though there's a lot more. They've come back with a nil response again after at least 12 months in meetings and talking about these things. So we just go in and be happy that that's the way it's going to be or do we try to change it?" 1. Mr Crowther recalled that, at approximately 2.45 am, a supervisor (Patrick (Terry) Daley) came out to the gate and asked what was going on and asked if the drivers were going in as he had to let management know. He said he replied that he did not know and told the supervisor to do what he had to do. The drivers resolved to wait at the gate for the other drivers who were scheduled to commence later. 2. Mr Ding stated the drivers were addressed by Mr Crowther who gave a report on the meeting held with management the previous day. He recalled that Mr Crowther concluded by advising the drivers, "it is up to you what you want to do". The drivers had voted to withhold transportation services. Another vote was taken when the next wave of drivers arrived at the gate at about 5 am. The same outcome was achieved. 3. Mr Ding recalled that when he entered the facility to use the toilet, he was advised by a staff member that he could not use the washroom. 4. Mr Ding, who admitted to having experience in stop work meetings, opined that it was unwise of Mr Barlow to ignore them at the gate rather than come out to find out what the problem was with a view to changing the agreement. 5. Mr Crowther gave evidence that when the rest of the drivers arrived at about 4 am, they held another meeting then stayed at the gate. He said Mr Daley returned with Mr Holmes. He recalled the following conversation taking place: Holmes: Is this about our meeting yesterday? Crowther: Yes. Holmes: Are you coming in? Crowther: Probably not. 1. At that point both men addressed all the drivers saying: Holmes: Anyone who wants to go in is able to go in. Crowther: You are free to go in, but you won't be represented by the union if you do. 1. Mr Crowther gave evidence that Mr Holmes walked away without asking them to return to work. 2. Mr Crowther insisted that no coercion was exerted, nor industrial action incited, by any member of the Drivers' Committee. He opined that the action taken by the drivers was a result of the drivers' frustration hitting boiling point. The last of the drivers arrived at about 5 am. They had taken 4-5 votes to ensure that the drivers wanted to continue to wait until management spoke to them. Mr Manning said, under cross-examination, that he made it clear that the strike action was not compulsory and that no one was being stopped from going in to work if they wished to do so. 3. The last two drivers to arrive were relief drivers. They drove into the site to undertake work. Mr Crowther said he was aware that they had been called by Mr Holmes. The drivers decided, as a collective, to remain outside the depot but not to stop the relief drivers from entering or block traffic entering or leaving the yard. 4. Under cross-examination, Mr Crowther confirmed that a decision was made at about 2.45 am, about 15 minutes after he arrived and briefed the drivers: As I've mentioned before, I told them I'd had enough, and that, I fed back the information from the meeting on the 19th, said, "We are hitting our head up against a brick wall here, we're getting nowhere, they don't care about the fact that all these changes cost us money and not them, and they're just putting us off again". So, I said, "That's it for me. I've been trying as a committee member to try to represent you guys; I've had enough; I'm going. 1. The drivers resolved, at about 2.45 am, to wait at the gate for the other drivers who were scheduled to commence later. Mr Crowther stated that the drivers resolved that they would wait at the gate until 10 am until someone from management came and spoke to them and tried to fix it up. By 10 am, no other members of management had come out to talk to them. He was present, fully dressed, with his truck, ready to work if someone had come to the gate and chatted to him. No other members of management came out to talk to them by 10 am. 2. Mr Manning, under cross-examination, stated that he had not spoken at the meeting of the drivers. He admitted that he had not disclosed Mr Barlow's offer (to re-negotiate the agreements) to the other drivers. He was not aware if any other member of the Drivers' Committee had disclosed it as the drivers were spread out over a fairly large area. He was preoccupied with a number of things going on in his personal life at the time and therefore if any other member of the Drivers' Committee had disclosed it, he was not aware. In any event, he did not think that it needed to be disclosed. He was hoping that Mr Barlow, as State Fleet Manager, would come to the gate and speak to the drivers as a collective. 3. Under cross-examination, Mr Manning admitted that he did not consider Mr Barlow's offer of possible renegotiation of agreements to be important: Brown: Given the situation that you were in and given that one of the potential outcomes of the meeting was that people would not provide services that day, do you not think it would've been important or vital to have conveyed to the drivers what Mr Barlow had said to you in response to your question? Manning: Yeah, no I don't think it was important. We – could I add to that? Will I answer, do you want a yes or no? …. Q: Do you think that if some of the drivers had been given that information they may have possibly acted differently? A: Well if he had come and spoken to them yes. Q: No sir I think you're misunderstanding my question. I'm suggesting – you've given evidence that you made, presumably, a conscious decision not to tell the drivers what Mr Barlow said in response to your question – A: The answer is no. I don't think it would've made any difference at all. Q: And why do you say that sir. A: Well that's my opinion. That's my opinion. …. Q: You in your capacity as a member of the Drivers committee decided, consciously or unconsciously that you wouldn't disclose this comment of Mr Barlow to the drivers. A: That morning, no. Q: But you can't explain why you did not do that? A: The answer is just no. I didn't think it was needed to be said. If it goes onto the – if we go further down the one – anyway, the answer is no and it was no. 1. Mr Manning agreed that no indication had been given to management at the previous day's meeting of the drivers' intention to withdraw their services explaining that strike action had not been contemplated at that time. 2. Mr Ding recalled that the Drivers' Committee, specifically Mr Crowther, did report to the drivers that Mr Barlow was willing to re-negotiate their contracts but "I think they mentioned, but nobody noticed. For me, I think that they mentioned, but I can't recall." 3. Mr Barlow stated that he arrived at the depot at approximately 6.40 am having received a telephone call at 6 am advising him that no drivers had entered the site. When he arrived, he saw a small number of driver vans parked outside. He noted that no member of the Drivers' Committee nor any individual driver had contacted or attempted to contact him by text message or otherwise to provide an explanation for their non-attendance for work. 4. Mr Barlow said that he made arrangements for relief drivers to be called in to perform the transportation services instead of the permanent crew of owner drivers. He then agreed with David Neaves that a text message be sent to the 42 drivers who did not provide transportation services that morning. He was aware that four drivers were on leave and were not involved in the dispute. 1st text message dated 20 April 2016 1. Mr Crowther gave evidence that it was very common for the respondent and its drivers to use text messages to communicate with one another. Both Messrs Crowther and Manning confirmed receipt of the first text message sent by David Neaves, National Transport Manager, at 6.40 am on Wednesday 20 April 2015. It read: To all contract drivers. I've been made aware that you have withdrawn your services this morning. Staples values its relationship with our drivers and customers and will always discuss issues affecting either, however, you must follow the disputes procedure in your contract which dictates escalation to myself at the first instance. I will not enter into any discussion under these circumstances. You are now in breach of your contract with Staples and as such, I would encourage any driver to return to work immediately. Non-provision of services may jeopardize the continuity of your contract with Staples. 1. Mr Barlow stated that he did not receive a single response to that text message. 2. Mr Ding confirmed that, with respect to his own contract, he consciously: 1. chose to withdraw his service that morning; 2. ignored the message contained in the text; 3. chose to ignore the call to return to work immediately; and 4. chose to ignore that his behaviour was putting at risk his on-going commercial relationship with Staples. 1. Messrs Crowther and Manning agreed that they had read the message, understood that it contained a clear warning in terms of the continuity of their contracts and decided to ignore it. 2. With respect to the collective, Mr Crowther gave evidence that upon receipt of that text message, the drivers voted to stay out in front of the yard. 2nd text message dated 20 April 2016 1. At 1.17 am on the same day, Darren Barlow sent a second text message to the drivers. Both Messrs Manning and Crowther confirmed receipt of the second text message which alluded to a more formal message that was to follow. It read: A further formal message will be sent later today. The events of today by some drivers and the unreasonable disruption to our customers will be addressed in a more formal way, but for those drivers who did not present to supply services today, these actions constitute a material breach of your independent Contractor Agreement, which must be rectified. As of tomorrow, please regard this text as formal confirmation from Staples Australia Pty Limited that your company is required to provide transportation services in accordance with the Agreement tomorrow. Whilst reserving our legal position with respect to today, any failure on your part to present for transportation services tomorrow will be: (a) a further material breach of the Independent Contractor Agreement; and (b) a deemed event of unsatisfactory level of services. Please, by return txt confirm by 2.00 pm today, that you will perform services as required on Thursday, 21 April 2016. If you have any genuine concerns about entry or exit to the premises, you are to contact Darren Barlow immediately. Please be assured that we have taken steps to ensure that the entry and exit to the site will be uninterrupted. 1. Mr Barlow stated that, once again, he had not received a single response to any aspect of that text message. 2. Messrs Manning and Crowther, under cross-examination, confirmed that they had read that text message, clearly understood the message it imparted and chose to deliberately ignore it. 3. Mr Ding confirmed that, once again, he had received, read and understood the text message and decided to ignore the direction to return to work, "No, I didn't intend to go back to work." 3rd text message dated 20 April 2016 1. Mr Manning confirmed that he had understood the contents of the third text message from Mr David Neaves sent at 1.47 pm on the same day and marked as a "formal" notification. He agreed that he had ignored the message in the text regarding breaches of the agreement and the fact that the drivers' failure to provide services was unsatisfactory in accordance with clause 5.1 of the agreement. The text message read: FORMAL NOTIFICATION On 20 April 2016, your company refused to provide transportation services in accordance with the Agreement with Staples Australia Pty Ltd. This message serves as formal notification of a material breach of the Agreement. In addition, your failure to provide services is deemed unsatisfactory to Staples in accordance with clause 5.1 of the Agreement. We are currently reviewing the legal position of Staples in relation to the breach of the Agreement. However, this message serves as an opportunity for you to rectify our concerns by confirming that your company will immediately take steps to comply with the Agreement by resuming transportation services tomorrow at your normal start time (without any modification, ban or limitation). In an earlier message, we have already requested that you confirm the resumption of services by 4.00 pm today. If you fail to confirm that your company will resume services for tomorrow, unfortunately the company may have little alternative than to consider the ongoing contractual arrangements. It has also been brought to our attention that some individual drivers may have engaged in activities designed to prevent other drivers from the provision of services in accordance with their respective Agreements. Please note that any such behaviour may be illegal and expose the driver to penalties under the federal legislation. We would also regard such behaviour as a material breach of the Agreement. If you have any questions about this message or what is or may be required of you and your company on 21 April and beyond, please contact Darren Barlow directly. 1. The text messages from the respondent had three themes – firstly, the drivers were in breach of their agreements; secondly, there was an invitation to return to work; and, thirdly, there was an offer to confer with any of the drivers if they wished to talk to Mr Barlow. Mr Barlow gave evidence that yet again, he had not received any communication in response to the above – either from the individual drivers, or from the Drivers' Committee or from Mr Sherwood. 2. Mr Crowther agreed that the third text message suggested that the drivers were in breach of the agreement they had with the respondent. He stated that, for his part, he knew he was in breach of the agreement and was prepared to continue to be in breach. He made no response to the request to return to work the following day although he was fully aware of the potential consequences of his behaviour, one of which was the possibility of termination of his contract. He refused to take the opportunity offered to return to work and discuss matters including, if necessary, ripping up the old contract in return for a new contract because the respondent "can't be trusted". 3. Mr Crowther said that, as a driver, he did not want to negotiate with Mr Barlow because he did not trust him albeit he agreed that he did not know Mr Barlow on a personal level. He wanted Mr Barlow to show them respect by coming out to meet with them at the gate because that would have been a sign that he was prepared to talk to them. 4. Mr Crowther stated that, at that point in time, he considered himself to be a representative of the drivers and was concerned that things were getting very serious following receipt of the three text messages. He agreed that some drivers indicated to him their willingness to engage in discussions with Mr Barlow, yet none provided transportation services the following day. He was not aware whether they had been prevented in any way from engaging in those discussions with Mr Barlow. Mr Ding acknowledged receipt of the third text message. He admitted that he read and understood that message and despite the warning contained therein, "… I didn't go back to work anyway". Wednesday, 21 April 2016 stop work 1. Mr Barlow stated that he arrived at the site shortly after midnight and was present at the time when the drivers would normally arrive to load their vehicles. He noted that a number of the drivers' vans were parked outside the site. None of those drivers drove into the depot to commence loading nor was there any contact made with him either by the drivers or members of the Drivers' Committee. 2. Mr Manning stated that all drivers, except for the two relief drivers, again stayed outside the gate on 21 April 2016 albeit they were dressed for work. Two of the drivers stayed at the front gate to advise other drivers, as they arrived, that they would be waiting outside for someone from management to address them. He recalled that members of management drove past them and through the gates. Mr Holmes stopped and asked, "what are you doing today guys?" Mr Manning said he replied: "We're waiting for you to come to talk to us." He said Mr Holmes replied "I'm not allowed to" before driving off into the depot. Mr Manning recalled that Mr Barlow would have driven in and out of the gates and past them at least four times that morning without saying a word. 3. Mr Crowther stated that the drivers held several votes during the morning. They elected on each occasion to wait outside the gate prior to dispersing at about 10.30 am. 4. Mr Manning stated that whilst at the gate, the opportunity was taken to elect two Health and Safety representatives. Mr Manning and Mr Paul Druce were elected. Mr Ian Sherwood communicated the election to the respondent. 5. At 2.04 pm on Thursday, 21 April, David Neaves, in consultation with Mr Barlow, sent a further text message to the drivers which read: MESSAGE FROM STAPLES Yesterday three text messages were sent to you in your capacity as a director regarding a material breach of your Independent Contractor Agreement that occurred on 20 April 2016. The text messages provided you with an opportunity to rectify the breach. You were requested to confirm by return text message your intentions to provide transportation services today. Unfortunately and disappointingly, you did not respond to me and did not again present at the site to provide the transportation services this morning. Accordingly, Staples must again regard your conduct as both unsatisfactory and a second material breach of the Agreement. This text message constitutes a final warning in relation to your conduct. Please be advised that you now have a final opportunity to rectify the ongoing breaches of your Agreement by not later than 3.30 pm today: (a) ringing Darren Barlow directly to discuss the concerns; and (b) confirming by text message to this number that your company will present at the Erskine Park site on Friday 22 April 2016 to provide your usual transportation services in accordance with the Agreement. If you do not contact Darren and confirm that your company will resume transportation services, Friday 22 April 2016, unfortunately and regrettably your actions may result in the termination of your Independent Contractor Agreement. Finally, as Staples is current making arrangements to source alternative suppliers, if you fail to advise us by 3.30 pm today of your intentions you will not be allocated transportation services if you then choose to arrive at the site tomorrow. 1. Mr Barlow, yet again, did not receive any communication from anyone in response to that communication. 2. Mr Manning, under cross-examination, confirmed the following: * He read and understood the meaning of the words used in that text; * He understood the words "final warning" to be very serious and could not get more serious than that; * There was an opportunity provided to speak with Mr Barlow, but he chose to ignore that request; and * He chose to ignore the direction to send a text message to confirm whether he will resume transportation services knowing full well the potential consequences that may flow from his conduct. 1. Mr Crowther acknowledged that text message and said that he chose to ignore it even though he had consulted the TWU and was advised by Ian Sherwood that there was a possibility that their contracts might be terminated. He stated that his mobile telephone was turned on all the time and he expected Mr Barlow to either ring him direct or come out to the gate to talk to them. Although he agreed that the text message indicated that it was highly likely that their contracts would be terminated, he did not think the action would be taken before the parties had a chance to air their grievance in the Commission. 2. Mr Ding recalled that there were cameras facing in their direction and a security guard was standing outside the warehouse. He also recalled that management did not speak to them on the second day of the stoppage. 3. Mr Ding did not respond to that text message either. During cross-examination, Mr Ding gave evidence that he considered those warnings as "reminders' to go back to work as he did not think that the respondent was "serious' or would be "stupid enough to terminate everybody's contract". He did not believe that his contract would be terminated given that he had provided 21 years' service to the Respondent. Termination of agreements - Friday, 22 April 2016 1. Mr Barlow arrived at the site at approximately 1.30 am on Friday, 22 April 2016. None of the striking drivers entered the site to undertake transportation services. 2. Mr Ding confirmed that a vote was taken when the drivers arrived at the site to continue to withhold transportation services. He also confirmed that another meeting was held at about 10 am at which time Mr Crowther said words to the effect that they could go back to work on the following Tuesday following the ANZAC day long weekend and "see what happened". The drivers had voted to return to work as proposed. 3. Mr Barlow was involved in a number of telephone discussions with the management of Staples. At approximately 8.30 am, he and Mr Neaves decided to terminate the Independent Contractor Agreements of the drivers involved in withholding transportation services. By 11 am, the termination letter had been prepared and 42 copies had been signed by Mr Neaves. Couriers were despatched at about the same time to deliver those letters to the registered business addresses of the companies who supplied the drivers. He was emphatic that the agreements were not terminated by text message. 4. The letter forwarded to each of the registered businesses read as follows: Termination of Independent Contractor Agreement Over the past three days you have been given multiple directions with respect to the provision of services by your company to Staples Australia Pty Limited ("Staples") under the terms of your Independent Contractor Agreement. Regrettably for both parties, and despite several opportunities to rectify the situation you have not responded to the reasonable directions contained in the messages to you. In addition your company did not present to provide services on 20 April 2016, 21 April 2016 or 22 April 2016. In your capacity as director you were advised of the potential consequences of your actions. Whilst it is open for Staples to regard your actions as a repudiation of your Independent Contractor Agreement, please be advised that Staples regards your actions as misconduct in that you have not complied with the reasonable requests of Staples in relation to the provision of the transportation services. Accordingly, and again regrettably, the Independent Contractor Agreement is now terminated effective Friday, 22 April 2016. We take this opportunity to remind you of the ongoing obligations that are set out at Schedule 1 of your Contract. Arrangements will be made with you separately regarding the removal of the Staples signage from your vehicle. If you have any questions with respect to this letter of termination, please contact Darren Barlow on …. 1. Mr Crowther stated that all the drivers met outside the gate again. He said he held several conversations with Mr Sherwood that morning during which it was agreed that the TWU lawyers would be asked to notify an urgent dispute to the Commission. Just prior to leaving at 10.30 am, the drivers held another vote and elected to return to work on the following Tuesday on the basis that the dispute had been escalated by the TWU to the Industrial Relations Commission. 2. Mr Barlow denied the allegation that the termination notices were sent out in response to advice from the TWU that the dispute had been notified to the Commission. He pointed out that the only communication received from the TWU prior to the termination letters being sent out was an email from Mr Sherwood at 11.49 am on that day advising of the election of the two Health and Safety representatives. The email read: I am writing to inform you that the following have been elected HSRs for Staples; Richard Manning and paul Druce. Regards…. 1. Under cross-examination, Mr Crowther agreed that the said email had made no reference to any approach to the Industrial Relations Commission of NSW. 2. Mr Barlow stated that a copy of the dispute notification, contained in an email on TWU letterhead, was not received by the respondent until 2.44 pm on that day. 3. Mr Barlow was aware that Troy Swan, Corporate Counsel, at 3 pm that day instructed the respondent's solicitors to file a Notice of Appearance in the matter immediately after receiving a call from the Registry advising of a listing at 2 pm on Tuesday, 26 April 2016. 4. Mr Crowther contended that Mr Nobbs had sent a text message on behalf of the Drivers' Committee to Mr Barlow advising that the drivers were resuming work from 2.30 am on Tuesday, 26 April 2016. 5. Messrs Manning and Crowther both confirmed that the drivers received another text message from David Neaves, National Transport Manager, which read as follows: As you know your contract has been terminated due to breach of contract. Just to set the record straight staples held meetings with the Union and drivers committee on Wed 7th April 2016 and the drivers committee on Tuesday 19th April 2016. I believed that the discussion would continue and was shocked to see the drivers not present for loading. Staples was never contacted by the committee, yourself or even the union while you did not present for loading. I think it would be within your best interest to call me today or tomorrow to discuss. 1. Mr Crowther said he, personally, had not received that message. He said members of the committee started to receive telephone calls from many drivers advising that Mr Barlow and Mr Holmes were calling to tell them that formal advice of the termination was being couriered to them; advising them of a new fleet the respondent was putting together; and inviting them to sign an identical agreement by 4 pm on the following Monday. He said he rang and advised Mr Sherwood of that development. 2. Mr Crowther stated that he had several conversations with Mr Sherwood on the morning of Friday, 22 April 2016 during which they discussed the matter being referred to the Commission. In his statement, he advised that they had one conversation at around 2 pm when Mr Sherwood asked him to contact the respondent to advise that the Union was attempting to have the matter listed urgently before the Commission. Mr Crowther said he called Mr Neaves and left a voice mail to the effect, "the matter has been lodged in the Commission, you need to contact the Commission, and we will be back at work on Tuesday". Despite that message, a text message was received confirming that a termination letter had been forwarded earlier that day to the registered address of each company and seeking to be provided with a nominated email address if the drivers wished for it to be forwarded through that medium. Drivers were encouraged to direct any enquiries to Mr Barlow. 3. Mr Barlow stated that after the termination notices were issued, a number of drivers approached the respondent to discuss the possibility of the drivers and their companies entering into new Independent Contractor Agreement. By the time the conciliation conference was held on 26 April, four drivers had negotiated new agreements and commenced providing transportation services. 4. Mr Ding confirmed that, at about 11.30 am on 22 April 2016, he received a letter, delivered by a courier, advising of the termination of his contract. He also received a text message at 4.28 pm confirming the termination of his contract. Removal of decals 1. Mr Crowther was aware that another text message was sent to the drivers at 2.39 pm on Saturday, 23 April 2016 from David Neaves which read: As your contract has been terminated please remove your signage from your vehicle and return your MDT, uniform and access pass to Staples within the next 30 days. Tuesday, 26 April 2016 1. Almost all drivers attended the depot – those who could not attend for personal reasons called Mr Crowther to advise him. The drivers arrived at varying times commencing from 2.30 am but there was a van parked at the gate blocking access to the depot. 2. Mr Crowther stated that his inquiries revealed that no contact had been made over the previous weekend by the respondent to offer a new contract to the following drivers: Hugh Crowther (Drivers' Committee member), Michael Nobbs (Drivers' Committee member), Richard Manning (Drivers' Committee member), Mark Harris (Drivers' Committee member), Richard Payne and Ronald Bennett. Compulsory Conferences Messrs Manning and Crowther attended the compulsory conferences held before Newall C at the Industrial Relations Commission on 26 and 29 April 2016 as a result of which they were aware that an opportunity was extended to all drivers to contact Mr Barlow about the possibility of re-joining the fleet. 1. Mr Ding said that he attended the Compulsory Conferences held on 26 and 29 April 2016. During cross-examination, Mr Ding confirmed that he was aware that other drivers were having discussions with the respondent about re-negotiation of their contracts. He chose not to make any approach to Mr Barlow as he had no intention of going back to work until the issues in dispute had been resolved. 2. Mr Barlow did not attend the proceedings on 26 April when the above agreement was allegedly reached. He argued nevertheless that the agreement reached at the compulsory conference was for the drivers to contact him and make arrangements to undergo an interview process. That was evidenced by the confirmation of the respondent's commitment which he sent in a text message to drivers at 12.30 pm on Wednesday, 27 April: Hi Drivers, You should be aware we are building a new fleet and starting to interview drivers. Several Drivers have already signed new contracts, and are at work. I also already have over 18 interviews scheduled today and tomorrow. Should you wish to arrange a time to be interviewed and negotiate a new contract, feel free to contact me asap as I will shortly be making permanent arrangements for our customers. PS- If you have already made arrangements please ignore this message. Darren. 1. Mr Barlow stated that, in preparation for the interviews to be conducted from 29 April, he and Mr Holmes devised a set of template questions that were to be used at each of the interviews. He asked the questions on the template and both he and Mr Holmes wrote down the answers provided by the drivers. 2. Mr Barlow stated that he commenced receiving telephone calls that afternoon to take up the offer. By early May 2016, either through telephone conversations or face to face meetings, he had issued 35 new Independent Contractor agreements. As at 26 July 2016, 33 out of the 42 terminated drivers had resumed their commercial relationship with the respondent. 3. Mr Barlow gave evidence that Mr Ding had, at no stage, contacted him or sought to contact him with respect to the possibility of him and/or his company entering into a new agreement. 4. Mr Barlow denied the allegation that drivers were bullied by management, including himself and/or that members of the Drivers' Committee were observed more closely in the provision of their services. He also denied the allegation that the respondent was vehemently anti-union or that he had knowledge as to who was or was not a member of the TWU. 5. Mr Barlow stated that the outcome of the individual discussions was that an opportunity was provided to each driver to discuss their individual preferences and to negotiate terms that included fixed terms of from 8 to 21 months from the commencement of the new agreements. A clause was also inserted allowing either party to terminate the agreements prior to the expiry of the fixed term. 6. Mr Barlow explained that 28 drivers negotiated new agreements without a rate change. In the case of five other drivers, their rates were reduced as a result of a reassessment of their hours worked and the kilometres travelled within their geographical area. There were new rates agreed that resulted in a reduction in the carton rate. Each agreement also contained a new provision with respect to lost pallets. 7. In relation to members of the Drivers' Committee, Mr Barlow advised that Mr Nobbs indicated that he wished to enter into new contractual arrangements and did so; Mr Manning took up the offer to discuss entering into new contractual arrangements (despite the return of Staples uniform and property on 26 April); and Mr Harris telephoned to indicate that he did not wish to discuss the matter further would be returning Staples property on 29 April 2016. submissions The submissions on behalf of the drivers are summarised as follows: 1. Mr Gibian addressed his submissions under three headings: 1. The conduct of the respondent in taking advantage of the situation to pursue industrial goals of destroying collective negotiations of agreements; 2. The fact that the respondent did not consider the effect of the termination of the agreements on the individual drivers; and 3. The remedies available in the form of compensation to the individual drivers. Section 314 matters 1. The TWU submitted that the Commission has a very open discretion in the context of an application under s314. 2. It was submitted that the discretion to order reinstatement was, unlike s84 applications, not limited in relation to the circumstances in which that discretion is to be exercised. 3. The grounds upon which the Commission would consider ordering reinstatement of a contract of carriage or, alternatively, compensation for termination of a contract of carriage, is analogous to those which would be regarded as leading to that result under Part 6 of the Act. In other words, it may be applied in the same circumstances as apply to employees – a consideration of resignation or constructive dismissal, reinstatement and compensation: Cherry v Allied Express Transport 73 IR 305; In other words, the termination of the agreement was unfair and, in the absence of an express actual provision inserted by Parliament, the Commission is not necessarily limited to a circumstance where the termination is harsh, unjust or unreasonable as the Commission is required, under s84 proceedings. This approach is consistent with a general approach to unconfined discretions or undefined discretions: Transport Workers' Union (NSW) v Toll Transport Pty Ltd [2015] NSWIRComm 36. It is therefore open, under s314, for the Commission to have regard to the general industrial justice of the situation. 4. Mr Gibian noted that s314 does not refer in express terms to unfairness or harshness, unjustness or unreasonableness in the same way as section 84, Unfair Dismissal, of the Act does with respect to employees. It leaves the discretion open as to the circumstances in which the Commission might make an Order under ss (1) or (4) of s314. 5. In Cherry, Peterson J went on to refer to the decision of the Full Bench in Greyhound Australia Pty Ltd v Transport Workers' Union of Australia (NSW branch) (1987) 21 IR 388 which referred to an earlier provision of the 1940 Act. His honour noted that there was power to make a contract determination with respect to reinstatement of a contract of bailment, but the Commission lacked the power in relation to a contract of carriage. An amending piece of legislation was put before Parliament to remedy that deficiency. Peterson J then opined that it was appropriate to interpret the power as one which was to be applied at least, if not solely, in circumstances where there has been an unfair termination of a contract of carriage. In other words, it would apply in the same way as it would apply to employees in considering resignation, constructive dismissal, reinstatement and compensation. 6. The TWU relied on the decision of then Acting Justice Kite, in Transport Workers' Union (NSW) v Toll Transport Pty Ltd (2015) IR 262 at 265, as to the principles to be applied in case of such an application. 7. In summary, the authorities demonstrate that the Commission's discretion is unfettered and that one of the circumstances in which the Commission may exercise its powers under s314 of the Act to reinstate a contract or order the payment of compensation is where it is satisfied that the termination was "unfair' having regard to whether there was a proper or "valid" reason for the termination, the overall conduct of the parties and whether the termination was "harsh" in all the circumstances. The Evidence in the matter 1. The facts of the matter leading up to the termination of the agreements were not greatly in dispute. It was submitted on behalf of the drivers that the issues in dispute were genuine and serious concerns that the drivers wanted the respondent to address in order to achieve a fair and appropriate remuneration and working conditions as both matters had caused them to be disadvantaged in a significant way. 2. The drivers complained that it took substantially longer (about 15-20 minutes) of work to earn $2 on home deliveries. Since the renegotiation of the agreement in 2014, there has been a substantial increase in home delivery orders because of the staples.com sales and the transfer of the work from external contractors to the respondent's own drivers. Those changes had a significant financial and time effect on individual drivers depending on their run. 3. As remuneration was solely based on delivery of parcels, the drivers were not remunerated for the additional work of reallocating parcels that had been incorrectly distributed. Mr Crowther gave evidence that the matter was a long-running sore which the respondent was addressing years after it was first raised. The respondent had been dismissive in its response. 4. A collective decision was made to cease transportation services until the respondent came out to the gate to talk to them. That requirement was communicated to the Fleet Supervisor, Mr Holmes, and the Team Leader, Mr Daley. It was not disputed that the drivers ignored text messages directing them to return to work. The drivers were critical of the fact that the respondent engaged in communicating threats by text messages rather than taking the most straightforward course by approaching the drivers directly at the gate and seeking to engage in further discussions about the issues or notifying the matter to the Commission. 5. Mr Barlow gave evidence on behalf of the respondent yet was unable to give any direct evidence about the terminations as he did not have any involvement in the matter. Mr Barlow gave evidence that the respondent commenced sending out the termination letters at 11 am. The dispute was filed in the Commission at 12.27 pm and communicated to the respondent. The drivers' committee communicated with Mr Barlow at 1.51 pm advising of the drivers' resolution to resume transportation services unconditionally on the next shift (on the following Tuesday). Instead of the respondent communicating a response withdrawing the termination letters, it proceeded to send text messages to drivers at 3.41 pm advising that letters had been forwarded to them terminating their agreements. 6. It was obvious that the respondent did not wish to sever its relationship with some of the drivers. Initially, during the long weekend, Mr Barlow invited some drivers to return to work if they signed a new agreement by 4 pm on the ANZAC day Monday. As a result of the conciliation proceedings, there was a general invitation to drivers to arrange to attend an interview with Messrs Barlow and Holmes with no guarantee of an offer. Those who took up that offer, because of the financial situation they were in, received offers of contracts which had been altered in substantial ways designed to, as Mr Barlow admitted in cross-examination, prevent future collective negotiation of contracts. The alterations included variations in expiry dates, introduction of new termination provisions to reduce notice provisions down to two weeks, cutting of rates and the requirement to sign a release in relation to the s314 proceedings. 7. The Commission was invited to draw Jones v Dunkel (1959) 101 CLR 298 inferences with respect, firstly, to the failure of the respondent to call evidence from key figures involved in the decision making as to how to deal with the stoppage and the termination of the agreements. Those persons included Mr Neaves, the National Transport Manager, and Mr Taylor, Vice-President-Supply Chain. Mr Neaves sent the first of the text messages and the letter of termination. It was plain that Mr Taylor was the senior person dealing with the situation. Secondly, the respondent's failure to call evidence from a number of other managers involved in the events at Erskine Park during the period of the stoppage - Mr Holmes, Fleet Supervisor, and Mr Daley, the Team Leader. The Commission was reminded that the latter two, floor Managers, had been involved in interactions with the drivers during the stoppage. Thirdly, it was noted that the evidence of Mr Manning conflicted with that of Mr Barlow as to what was said during the post-termination interviews. The respondent failed to call Mr Holmes who was present during that interview to give evidence. 8. The Commission was urged to give very little weight to the evidence of Mr Barlow whose evidence, it was contended, was "deeply unsatisfactory" as he had adopted "a repeatedly partisan" approach in relation to any matter that would be damaging to the respondent's case. For example, he denied any knowledge of drivers buying into their runs with the respondent until he was taken to documents he had drafted which demonstrated that the issue had repeatedly been raised with him by the Drivers' Committee. 9. It was submitted that it was appropriate for the Commission to exercise its powers pursuant to s314 of the Act for the following reasons. Firstly, it was not disputed that the drivers ceased transportation services for three days and ignored repeated directions to return to work. The Commission was asked to consider whether, in a fairness sense (as opposed to a strict contractual sense) that was appropriate justification for the termination of their agreements. 10. Secondly, the TWU members submitted that the termination of their contracts was an unnecessary and unwarranted harsh approach having regard to the circumstances that existed at that time and having regard to the personal consequences of each driver. Mr Barlow conceded that the respondent had proceeded with the terminations despite having knowledge of the following: * the TWU had escalated the dispute to the Commission; * the drivers would be resuming work on the following Tuesday, 26 April; * the termination of the agreement placed the drivers in an extremely vulnerable position, both personally and financially; * Some had invested heavily (more than $100,000) to buy into a run; * Some had purchased and maintained a vehicle specifically for undertaking that run; and * The work constituted their only major source of income. 1. Thirdly, the Commission was invited to draw an inference from the fact that those who had not been contacted over the ANZAC weekend included all the members of the Drivers' Committee. 2. Fourthly, it was pointed out that the respondent terminated all the drivers even though it obviously did not wish to permanently sever its relationship with all of them. It was submitted that the respondent took advantage of the situation to impose its industrial agenda. It exploited the inferior bargaining position of the drivers by contacting the majority of the drivers over the long weekend and offering agreements to them in the knowledge that, by the termination of their agreements, the bulk of the drivers had been placed in an extremely precarious financial and personal position and they had no practical option but to accept whatever terms were on offer or face financial ruin. The respondent took advantage of the circumstances to achieve individual contracts with different expiry dates to prevent collective negotiations in the future. That position was confirmed by Mr Barlow in cross-examination: Q: You didn't want there to be collective representation of drivers. A: Correct. Q: And as we've discussed, you put in arrangements for differing termination dates. A: Correct. Q: So that there wouldn't in future be collective negotiations through the drivers'[ committee, correct? A: Correct. 1. Lower parcel rates were imposed on some of the drivers. A provision was inserted providing only two weeks' notice of termination thereby eroding any security of engagement the drivers may have had. In addition, a provision was inserted requiring drivers to discontinue any proceedings before the Commission and releasing any rights that they may have arising from the facts and the circumstances of a reinstatement case. 2. The approach adopted by the Industrial Relations Commission of NSW is to regard collective industrial action as not justifying termination of employment as it is a group act involving industrial action and not an individual act of misconduct in the accepted common law sense. The Commission expects discussions with the union or group involved or referral to the Commission for further recommendations or, if necessary, dispute order: Federated Storemen & Packers Union, NSW branch (1987) 22 IR 198 (per Macken J): It is trite law that strikes do not usually give rise to the exercise of an employer's right to summarily dismiss for misconduct. One reason for this is that a strike is usually a group act following a decision of a group of employees or a union to which they may belong. Such a characteristic almost always involves an employer in dealing with a difficulty pursuant to the Industrial Arbitration Act or at least by way of discussions with the union or group involved in the strike… 1. Macken J went on to point out that industrial activities can rarely be held to evidence firm and final determination on the part of the employee to abandon the employment contract. Only a serious and fundamental breach of the duties arising under the employment contract will entitle an employer to dismiss an employee for misconduct. A temporary state of affairs, such as the industrial action that occurred in these proceedings, does not evidence a permanent ongoing refusal to comply with the contract: A second reason for the fact that common law rights of termination of employment are rarely exercised in connection with strikes or bans on the performance of work is to be found in the fact that such industrial activities can rarely be held to evidence a firm and final determination on the part of an employee to abandon the employment contract. 1. The decision in the Federated Storemen & Packers Case was endorsed and adopted by Connor C in Shop, Distributive and Allied Employees' Association v Wollongong UniCentre Limited [2005] NSWIRComm 1138 and AWU v BHP Steel [2004] NSWIRComm 1045 wherein the Commissioner noted his reservation about including a record of any involvement in industrial action in an employee's personnel file for disciplinary purposes. Generally speaking, the Commissioner did not believe that it was appropriate to include, and questioned the wisdom of including, attendance at a stop work meeting, even where it constituted a clear breach of the grievance procedure, in warning letters to the employees concerned. 2. In Transport Workers' Union of New South Wales (on behalf of TWS NSW Pty Ltd v Transport) and Smartskip (NSW) Pty Ltd [2008] NSWIRComm 55, D P Sams noted: 1 Even if I accept that the applicants had said that they and the other drivers were on strike until the matter was resolved, such a statement could not possibly form the basis of the almost instantaneous decision to give them letter of warning and letters terminating their contracts…. 1. The Union submitted that the approach was consistent with the decision in R v Commonwealth Court of Conciliation and Arbitration; Ex parte BHP Co Ltd (1909) 8 CLR 419 in which Griffith CJ held that industrial action did not constitute a repudiation of a contract of employment because it did not "evince an intention that the relationship between them should come to an end". 2. It was argued that the rationale for the legislature granting the Commission powers to set minimum conditions in contract determinations and the capacity to make determinations with respect to reinstatement arise because of a general recognition that contact carriers or bailees are in a position analogous to employees and require a similar type of protection. 3. The evidence was clear that the respondent was aware of the practice, endorsed when the respondent was known as Corporate Express, for existing drivers to introduce potential drivers to the respondent. That practice had remained in place until early in 2016 when the drivers asked to formalise the 17-year old practice, but the respondent wanted to reduce the fleet. 4. Mr Barlow did not deny saying to Mr Manning that "It's only individual contracts now. There's no committee anymore. We'll be dealing with contractors individually. Also there's not an introduction to work." 5. The drivers represented by the TWU in these proceedings, given what has transpired, did not wish to continue to work for the respondent. Most had sold their vehicles and had concerns about trusting the respondent, particularly drivers like Mr Manning who were rejected following an interview. The Union was seeking compensation to be paid to those drivers in accordance with s314 of the Act. 6. It was submitted that the terminations were unfair for several reasons: * They occurred solely because of a period of industrial action decided on collectively by the drivers. As that action would not ordinarily give rise to an exercise of an employer's right to summarily dismiss, then the Commission ought to adopt the same approach given that drivers are in an analogous position to employees. * The industrial action was not wanton or precipitous – it was the result of at least 12-18 months of unsatisfactory response to genuine, long-standing and strongly-held grievances relating to incorrect allocation of freight and residential deliveries. * The respondent failed to take the most basic step of endeavouring to resolve the dispute before taking the extreme step of terminating the agreements. Mr Barlow admitted, under cross-examination, that the respondent was aware that the drivers simply wanted to engage in discussions with it, yet the respondent refused to even speak to them or take the matter to the Commission. Instead, it issued a series of texted threats which exacerbated the issue. * The reaction of the respondent was in stark contrast with its reaction on previous similar occasions when a return to work was achieved by the respondent undertaking to enter discussions about the issue in dispute. In a previous dispute regarding commencement times, Mr Barlow had gone out to the gate to talk to the drivers and work had not resumed until a meeting was arranged with senior management the following day. * Given the timeline, it was open to the respondent to withdraw the termination letters once it became aware that the dispute had been notified to the Commission, but it failed to do so. * Also given the timeline, it was open to the respondent to withdraw the termination letters once it became aware that normal work would be resuming at the commencement of the next shift, but it failed to do so. * The respondent took industrial advantage of the circumstances to engage a new fleet, to force a return to work and to achieve a superior bargaining position to force those drivers to accept unreasonable and unfair contractual arrangements with its drivers. * The respondent was aware that the majority of drivers who had been terminated were placed in such an incredibly vulnerable financial and personal position that they had no option but to accept whatever terms were offered to them in order to protect their personal and financial positions, including differing expiry dates, the imposition of lower rates on some drivers, termination of the agreement on two weeks' notice and releases from reinstatement claim. * The respondent required "selected" drivers to attend and sign a new contract by 4 pm on Monday, 25 April 2016, sight unseen. * The only inference that can be drawn from the fact that the previous members of the Drivers' Committee were not invited to enter into a new agreement during the ANZAC weekend is that the respondent wanted to remove persons involved in providing industrial representation to the drivers. That was confirmed by the evidence of Mr Barlow under cross-examination. * Following the conciliation conference, drivers were invited to attend an interview. The evidence revealed that Mr Barlow and Mr Holmes used that opportunity to find out about the stoppage, the involvement of the union and who was leading in the drivers during the dispute. 1. It was submitted on behalf of the Union that the Commission is entitled to consider the harshness of the terminations in considering whether to make an order under s314 of the Act: Transport Workers' Union (NSW) v Robar Enterprises Pty Ltd (2013) 238 IR 84 (at [60] – [71]). The terminations were harsh and disproportionate for several reasons: * It would appear, in the absence of contrary evidence from the respondent, that consideration was not given to the personal and financial effects that termination would have on the individual drivers. The drivers were reliant on their earnings from that employment to support themselves and their families as the work for the respondent constituted their sole or major income. * Mr Barlow admitted that the respondent did not consider the length of service of any of the individual drivers, the disciplinary or work history of any of the individual drivers, their personal circumstances, the debt situation they might have been in the business or what they paid to buy into their runs in making the decision to terminate the agreements. * All the drivers have had varying but substantial periods of service with the respondent. Whilst there was evidence of previous stoppages, there was no evidence of any matters previously been treated in a disciplinary manner; * The drivers paid substantial amounts investing in the purchase of their runs and those monies were entirely forfeited because of their terminations; * The drivers had necessarily incurred debt in buying or leasing a vehicle to undertake the work. Their vehicles were painted with the company's logo and livery. Those vehicles may or may not be capable of being used to derive remuneration in other work yet there were ongoing maintenance and costs associated with those vehicles; * The drivers had trouble in obtaining alternative comparable work particularly in the absence of transferable skills; and * The loss of productive engagement has had severe personal and emotional impact upon the individual drivers, including on their self-esteem and family relationships. 1. Section 314 permits the Commission to make a contract determination with respect to the reinstatement of a contract of carriage or payment of compensation. In the present case, the Commission can be satisfied that it would be impracticable to make a determination for instatement as each of the drivers no longer wished to perform work for the respondent having lost all trust and confidence in the management of the respondent, sold the vehicle used to undertake the work and/or moved on to other work. 2. It was submitted that s314 (4) had two aspects to it – firstly compensation that may be awarded is capped at six months calculated on the average remuneration paid in the six months immediately preceding the termination. Secondly, there needs to be a consideration of any reasonable attempt to obtain alternative engagements and any amount received from such engagements. 3. It was noted that the authorities did not seem to address the issue of how the remuneration needs to be calculated. In the TWU's submission, it ought to be calculated on the gross remuneration as the driver was still required to pay the running costs of his vehicle. Support for that approach was provided by the way redundancy payments were calculated. It was also submitted that the personal circumstances of each driver needed to be taken into account in determining the amount of compensation payable. The way they are considered is a matter in the discretion of the Commission: D & R Commercial Pty Ltd v Flood (2002) 113 IR 44. Respondent's Submissions The submissions on behalf of the respondent are summarised as follows: 1. Both the issue of wrong routes and the issue of home deliveries were known to the Drivers' Committee at the time of the 2014 agreement negotiations. 2. During the meetings held on 7 April and 19 April 2016, Mr Barlow gave a response in relation to the wrong routes which was accepted by the Drivers' Committee. The respondent was cautioned that it had until November 2016 to fix the problem. The evidence of Mr Barlow in relation to that issue was confirmed by the members of the Drivers' Committee who gave evidence. 3. The reality was that the drivers were seeking a fourfold increase in the parcel rate. 4. Mr Crowther, under cross-examination, confirmed that Mr Barlow offered to re-open the negotiations with the Drivers' Committee on home deliveries and to "rip up the old ones" meaning the agreements. Mr Crowther could not recall whether he had conveyed that response to the other drivers. Mr Manning conceded that he, personally, would have been content to re-negotiate the agreement but pointed out that he was just one man of a collective. 5. Both Messrs Crowther and Manning conceded that they had not made any mention to the respondent's representatives at those meetings about withdrawal of transportation services. 6. The position of the respondent in relation to both issues immediately prior to the withdrawal of transportation services on 20 April 2016 was: 1. It was committing substantial financial resources to addressing the perceived problems with wrong routes and it was anticipated that the matter would be resolved by the fourth quarter of 2016; 2. The claim for an increase in the parcel rate from $2.05 to $8.00 per parcel had been rejected; 3. Mr Barlow, on behalf of the respondent, had offered to renegotiate with an individual driver or drivers and, if agreement was reached on a new contract, then the present agreement would be ripped up. 1. It was submitted that both Mr Manning and Mr Crowther may not have accurately reported the position of the respondent. The Commission was urged to find that the present applicants withdrew their services: * for personal reasons; and/or * without full understanding of the respondent's position, particularly in relation to the renegotiation of the agreement. 1. It was not disputed that the respondent was not informed, either formally or informally, of the unilateral decision by the applicants, or all the drivers or the Drivers' Committee to withdraw transportation services. 2. The respondent issued three text messages to the drivers on 20 April 2016. The first two text messages (sent at 6.40 am and 1.17 pm respectively) alerted each of the drivers to the breach of their contractual relationship with the respondent; encouraged their return to work; warned of the risk to the continuity of their contract if they continued to withhold their services; noted a material breach to their agreement; sought rectification of the breach, requested confirmation by return text that normal services would resume the following day; and assured their safe entry and egress from the site if they chose to resume transportation services. 3. There was no response to those text messages causing the respondent to issue the third text message at 1.48 pm basically formalising what was stated in the previous two text messages. It was headed "formal notification". It provided the drivers with an opportunity to rectify the breach of the agreement otherwise the respondent would have little alternative than to consider the ongoing contractual relationship. They were warned that there will be consequences for their actions and advised how they could remedy the situation. Once again, they were invited to contact Mr Barlow directly if they wanted to discuss the matter. 4. None of the drivers made any contact and none provided transportation services the following day causing the respondent to send a further text message at 2.04 pm on 21 April 2016 which, amongst other things, pointed out that the drivers' conduct was both unsatisfactory and a second material breach of the agreement and issued a final warning in relation to that conduct. The text message, nevertheless, provided a further opportunity for the drivers to rectify the situation by contacting Mr Barlow by 3.30 pm on that day to discuss their concerns and turning up the following day to provide transportation services. 5. Each of the eight drivers gave evidence that they made very deliberate and conscious decisions to ignore the text messages, to ignore the matters contained in such text messages and not to provide their services. They ignored repeated contacts from the respondent to engage them and to encourage them to contact Mr Barlow in particular to discuss their issues. They all gave evidence that they understood the threat contained in the fourth text message. It was submitted that the drivers were "brazen" in their response, "deliberately defiant". They said they ignored that message or took no steps to contact the respondent. They held the view that there would not be any consequences for their actions. Mr Ding gave evidence that he was aware that by not providing transportation services for three days in a row that one of the possibilities was the termination of his contract. He had read and understood the text messages but deliberately chose to ignore their contents because he did not think that Staples was "serious" and "did not think they were stupid enough to terminate everybody's contract". It was submitted that it beggared belief and bordered on childish when all 42 drivers, all business men, would rather sit on the street at Erskine Park from 2 am and expect Mr Barlow to go out and talk to them than accept his invitation to "talk to me", 'text me", "contact me". 6. Mr Barlow gave evidence to the effect that he, in consultation with Mr Neaves, decided at 8.30 am on 22 April 2016 to terminate the agreements of all the drivers. By approximately 11 am, the 42 termination letters had been completed and were being dispatched by courier from the Mascot office of the respondent. 7. Mr Barlow was emphatic in his evidence that he had not known about the lodgement of, or intention to lodge, a dispute notification prior to making the decision to terminate and, indeed, did not become aware of the dispute notification until 2.44 pm on that day. 8. The respondent needed drivers and Mr Barlow started to contact the terminated drivers over the ANZAC long weekend. Those drivers who negotiated a return to work did so voluntarily. They were required to sign a new agreement as the previous agreements had been terminated. It was as simple as that. Mr Barlow did not deny that he was selective as to which drivers he approached. Mr Ding was not one of those selected. 9. Arising out of the conciliation conferences before the Commission in the week commencing 26 April 2016, the ability was available for all drivers to contact Mr Barlow if they wished to discuss the possibility of returning to the site. 10. Ultimately, 33 out of the 42 terminated drivers met with Mr Barlow and progressively entered into new agreements in the week commencing 26 April 2016. The evidence demonstrated that only five out of the 33 drivers who returned had different periods of time and only a small number were on different rates. 11. Five out of remaining nine drivers, including Mr Ding, made a personal decision not to contact Mr Barlow with respect to the possibility of him and/or his company entering into a new agreement. It cannot be assumed that they had prior knowledge that their terms and conditions would be less than what they had in the terminated agreements. It was submitted that, by not having that discussion, they lost any opportunity of mitigating their losses. 12. Under cross-examination, Mr Ding confirmed the following: 1. He was paid for successful home deliveries as per the agreement; 2. Home deliveries were not a major problem for him prior to February 2015 as Surry Hills did not have many residential dwellings; 3. When he attempted to make a residential delivery and the addressee was not home, he left a card for the home owner and took the parcel back to the depot. The recipient would call the number on the card and provide a time when they were going to be home so that delivery can be attempted on another or the following day. He was paid by the respondent for both attempts at delivery "sometimes" because if he included his mobile telephone number of the calling card, then the customer would ring him directly and he would return to that address on the same day; 4. His normal run only required him to do about one or two a week except for periods when online sales were conducted; 5. The .com sales happened twice – once when he was required to deliver about seventy parcels that week and another time when he was on leave; 6. Mr Barlow's offer to renegotiate the agreement was relayed on to all the drivers together with the statement that "management refused to budge" on the issues of concern; 1. Mr Brown noted that the TWU had, very early in the proceedings, deliberated for a period on whether to make an application pursuant to s346 of the Act but ultimately chose not to do so and opted, instead, to pursue individual actions pursuant to s314 of the Act. 2. The Commission, if it was inclined to consider payment of compensation, need therefore not be troubled about considering the issue of "lost investment" in assessing such compensation. Not only is such a claim inconsistent with the legislation, it is contrary to the terms of the agreement signed by the individual drivers. 3. In relation to the Jones v Dunkel inference, it was argued that Mr Barlow was clearly the management representative who had responsibility for dealing with the matter. It was he who the drivers were encouraged to contact. He gave evidence as to his participation in the decision-making process. 4. Mr Brown submitted that it was a dangerous analogy to liken the drivers' withdrawal of transportation services to industrial action by a group of employees. The union submission was criticised as seeking the benefits of the analogy but not the burden. 5. The respondent's primary submission was that no compensation was payable to any of the drivers. However, if the Commission was against the respondent on that, then it would submit that the Commission have regard to ss 314 (5) in relation to what each of the individuals did to mitigate their losses. 6. Each of the eight drivers, under cross-examination, gave evidence that they, on professional advice, allocated to themselves an amount of wage. At least two of them also allocated a wage to a spouse and the remainder was written off as expenses. Based on that clear evidence, there is no need to look to the decision D P Sams in the Transport Industry - Redundancy (State) Contract Determination IRC 7121 of 2003 (C5924) for guidance. Consideration Legislative framework 1. The TWU made an application pursuant to section 314 of the Act on behalf of eight members seeking a determination in relation to compensation claiming their termination was unfair. The section provides: SECTION 314 - JURISDICTION WITH RESPECT TO REINSTATEMENT OF CONTRACTS 314 (1) [Contract determination] 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. 314 (2) [Re-engagement under similar contract] Reinstatement of a contract includes re-engagement under a similar contract. 314 (3) [Terms and conditions of contract determination] 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. 314 (4) [Reinstatement impracticable] 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. 314 (5) [Assessment of compensation] 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. 314 (6) [Effect of contract determination] 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 in the Industrial Gazette. Contractual Requirements 1. It is noted that Mr Ding signed a document titled "Acknowledgement" on 23 May 2014 in which he acknowledged three pre-conditions attached to the agreement he had signed with the respondent: that the Independent Contractor Agreement attached and marked Annexure A to the Release and Acknowledgement is for an agreed term and may be terminated prior to the expiry date of the agreed term in accordance with its terms without compensation. [emphasis added] that there is no representation of, any further opportunity to provide transport services to or on behalf of Staples Australia beyond the expiry of the agreed term or any prior date of termination in accordance with the Independent Contract Agreement. that the Independent Contract Agreement may not be assigned to any other party without the prior written consent of Staples Australia and that such assignment is subject to any terms and conditions determined by Staples Australia. 1. The agreement which was current at the time of the termination of the contractual relationship contained the following relevant clauses: 2.5: The Contractor and the Director acknowledge that in circumstances where pursuant to clause 2.4 Services are not provided by the Director pursuant to this Agreement; (a) … (b) … (c) failure to advise Staples of any period of non-engagement will be a material breach of this agreement. 2.7: In allocating deliveries to the Contractor, the Contractor acknowledges and accepts that: (a) The parties have not set any minimum level of Services; (b) the allocation of Services will change in accordance with the needs of Staples including the balancing of individual runs, reallocation of work and geographical boundaries; and (c) the contractor will not acquire a right to any minimum level of Services or preservation of any designated run, route or geographical area or client list. 4: Termination by either party prior to Expiry Date 4.1 This Agreement will terminate prior to the Expiry Date where: (a) …. (b) Staples terminates the Agreement with 2 weeks' notice for a material breach of this Agreement and only after providing the Contractor with an opportunity to rectify the breach pursuant to clause 5; or (c) Staples terminates the Agreement without notice in circumstances of misconduct by the Contractor and/or the Director. Misconduct includes but is not limited to: Non-compliance of a reasonable request by Staples; … 11: …. 11.2 In addition to the acknowledgement referred in recital D the contractor and the director acknowledge that Corporate Express does not directly or indirectly require the payment of any fee for goodwill as a pre-condition for the provision of the services or the entering into of this or any other agreement for the provision of the services (including any assignment). 12: Resolution of Disputes 12.1 This procedure will apply to any dispute or grievance with respect to the interpretation of this Agreement. Step 1 The grievance must be raised with the NSW. State Transport Manager/ Supervisor. Step 2 If the matter is unresolved, the grievance will be referred to the National Transport Manager. Step 3 If the matter is unresolved, the grievance may be referred to the Vice President, Supply Chain, Australia and New Zealand. Step 4 If the matter remains unresolved, the Contractor may either: (a) request non-binding mediation. Where the parties agree on a mediator, the cost of the mediator will be paid by Staples Australia. All other costs will be borne by the respective parties; and/or (b) seek the assistance of the Transport Workers Union, any trade union or legal counsel to notify the New South Wales Industrial Relations Commission of this matter. In the event of the matter being notified to the New South Wales Industrial Relations Commission the parties to the notification will participate in the conciliation of the matter. Subject to the Industrial Relations Act 1996 the NSW IRC may exercise its powers in relation to assisting the parties to resolve the matter…. 1. In Cherry, Peterson J, having considered the history of the s314 provision, stated: … In the light of this history, it seems to me appropriate to interpret the power as one which is to be applied, at least if not solely, in circumstances where there has been an "unfair" termination of a contract of carriage. This means that it may be applied in the same circumstances as apply to employees. Here that involves considerations of resignation or constructive dismissal, reinstatement and compensation. 1. I accept the submission of Mr Gibian that the Commission is not limited to a circumstance (as is the case with s84 matters) where the termination is harsh, unjust or unreasonable. 2. It is not disputed that several contracts of carriage were terminated which therefore enliven that provision. 3. I refer now to the authorities cited by the parties. Unlike the facts in Smartskip, the drivers in this instance advised that they were withholding transportation services until management spoke to them about their issues. In fact, management had spoken to them about both issues at the meetings on 7 and 19 April 2016. The drivers had accommodated one issue – wrong routes – and given management until November 2016 to introduce the new technology to address that problem. The only outstanding issue – that of home deliveries – was the subject of an offer by Mr Barlow to renegotiate the contracts. Irrespective of the respondent's alleged motives or intentions, no response was provided to Mr Barlow's offer and, indeed, there was little evidence that the offer was even relayed to the drivers on 20 April 2016. 4. Unlike Smartskip, the letters of termination were not instantaneous – there were a series of four text messages which have been described in detail above. They provided each driver with warnings as to the possible outcome of their actions and provided opportunities for the matter to be resolved without termination of the agreement; and finally, there was no evidence of the respondent denying the drivers their legitimate and legal right to have the union involved in resolving the issue nor was there any evidence before the Commission that the drivers were not allowed to have the union involved when negotiating a new agreement. Mr Manning gave evidence of his interview with Mr Barlow and Mr Holmes. He did not give any evidence that he asked to have a representative from the union present with him and was refused that right. 5. The following matters were not in dispute: * The Drivers' Committee negotiated with the respondent on behalf of all drivers a standard agreement which was then signed individually between the drivers and management; * Only one of the eight drivers who are the subject of these proceedings had terms and conditions that were different in any material way. * Only one of the eight drivers had a different rate for the per parcel delivery. It was not Mr Ding. * The last agreement negotiated was in May 2014 and was for a term of three years to expire in 2017; * Each driver also signed an acknowledgement, as described in paragraph 239 above as a pre-condition to the execution of the agreement. The said acknowledgement addressed the agreed term of the agreement and the ability to terminate prior to the expiry date without compensation under certain conditions. * The respondent terminated the agreements of the drivers, including Mr Ding's agreement, on Friday 22 April 2016; * At the time of the termination of the driver agreements, all eight drivers were participating in an ongoing refusal to supply transportation services in accordance with their commercial agreements; * The terminations were lawful; and * The TWU case was predicated on the issue of the alleged "harshness" of the decision to terminate the agreements. 1. Mr Ding confirmed that, with respect to his own contract, he consciously: * chose to withdraw his services; * ignored the messages contained in the text messages because he did not think that the respondent was "serious"; * chose to ignore the call to return to work immediately; * chose to ignore that his behaviour was putting at risk his on-going commercial relationship with Staples because he "did not think they were stupid enough to terminate everybody's contract"; and * chose not to contact Mr Barlow about the possibility of negotiating a new contract with Staples "for personal reasons". 1. It was not disputed that home deliveries had been undertaken throughout Mr Ding's engagement with the respondent, a fact that was known to the members of the Drivers' Committee who were entrusted to negotiate the 2014 three-year agreement to which he became a party. 2. Mr Manning gave evidence that he quite deliberately did not disclose to the other drivers, who were not members of the Drivers' Committee, what response Mr Barlow' had given on behalf of the respondent in relation to the two issues in contention. 3. I accept that there is a history of runs being traded over the previous 17 years and, in response to an attempt by the drivers to formalise the matter, in about July 2014, drivers were permitted to introduce a new driver to the company, subject to the respondent accepting that the person was an appropriate person to take up the job. 4. Mr Gibian pointed out that much was being made of Mr Barlow's "reasonable" offer, made on 19 April 2016, to re-negotiate the agreement. However, the offer ought to be put in perspective: * There was a substantial increase in home delivery work after the making of the 2014 contract arising from the transfer of that work from StarTrack to the contractor drivers; * The request for an increase in the schedule of rates had been considered and rejected by Mr Barlow on the basis that, legally, the service was built into the carton rate as per the schedule; * Mr Barlow made it clear that the respondent was able to give individual drivers as many home deliveries as it wished; * The offer to renegotiate the agreement was on the basis, as conceded by Mr Barlow under cross-examination, that if the respondent was going to pay a higher rate for Staples.com, then it would need to lower the normal carton rate. 1. I accept that the stoppage on 20 April 2016 was a spontaneous event. 2. It is abundantly clear that the drivers lacked industrial savvy, on-site leadership and sound industrial advice for several reasons: * Firstly, they concluded a 3-year agreement in 2014 on behalf of all the drivers in the knowledge that wrong routes and home deliveries were very much live issues to some of the drivers, depending on their run. It is noted that it was not an issue for Mr Ding personally until he started to notice the difference in 2016 with the increase in the dot.com orders. It only became an issue when the .com sales were on. * Secondly, at the meetings on 7 and 19 April 2016, the Drivers' Committee agreed, on behalf of all drivers, to stand the matter over to do with the wrong routes until November 2016 to give the respondent an opportunity to introduce new technology it had invested in to fix the problem. Given that response by the Drivers' Committee on behalf of all the drivers, it is not an issue that can seriously be pursued in these proceedings; * Thirdly, the criticism has been made that management did not come out to the gate to talk to the drivers instead of texting them. There is no written rule in relation to who makes such an approach. Mr Barlow gave answers at the meeting on 19 April and left it open that he was willing to re-negotiate the agreement. Setting aside whether his response was reasonable or otherwise, he was entitled to believe that it was up to the Drivers' Committee to provide him with a response to that offer. If it was rejected following the meeting of the drivers that morning, then one would expect that, given the TWU Organiser was present at the gate with the drivers all that morning, he, accompanied by the members of the Drivers' Committee, would have gone into the site to discuss Mr Barlow's response with him and other senior management or, at the very least, formally communicated the drivers' response to management. That had not occurred, and the respondent was left to presume what the stoppage was about. * Fourthly, there was no instruction from the drivers to do so most probably because there was no evidence that the offer to re-negotiate was relayed on to the drivers. Mr Manning had not, as a member of the Drivers' Committee, communicated Mr Barlow's offer to the other drivers. His action, as already conceded, was deliberate; * Fifthly, each of the agreements contained a dispute resolution clause which was not complied with by the drivers prior to industrial action being taken; * Sixthly, whilst Mr Barlow had, on two previous occasions, gone out to the gate and spoken to the drivers in relation to other matters in dispute, there was also a practice, and it was not unusual, for the parties to communicate by electronic means; * Seventhly, members of the Drivers' Committee had discussed the text messages with the TWU Organiser and were made aware that, given the tone of the text messages, there was a strong likelihood that their agreements would be terminated. Yet, there was no movement by the Union official and the members of the Drivers' Committee, on whom all the drivers were relying for industrial representation, to approach management for further discussions. * Eighthly, there was much talk about distrust of Mr Barlow, yet there was no evidence before the Commission to justify those personal views. Indeed, the evidence demonstrated that the drivers did not have any personal knowledge of Mr Barlow and could not provide any logical reason for harbouring those feelings; * Ninthly, when the drivers were contacted individually, they proceeded to hold meetings with, and negotiate personally with, management for new agreements. In fact, 33 out of the 42 owner drivers returned to work for the respondent; and * Tenthly, either party could have notified an urgent dispute to the Commission. The respondent did not do so. When the drivers eventually instructed the TWU to notify the dispute, the stoppage was already on its third day and the drivers had received three emails in succession advising of the likely consequences of their actions prior to the termination notice being couriered out to them. It appears that the termination letters were prepared, signed and being couriered to the drivers when the dispute notification was lodged that afternoon, immediately before a long weekend. The only email communication received that morning from the union advised the respondent of the election of two health & safety representatives. 1. Mr Crowther confirmed, under cross-examination, that when he joined the Committee he was already on notice from the drivers regarding their concerns about home deliveries. Nevertheless, the parties reached agreement on the per parcel rates which were fixed for the 3-year term of the agreement, subject to annual CPI increases: BROWN: … And part of your role on the committee was to gather up the ideas and the concerns, and do I take it that one of the concerns that would've been live at that time was the fact that from December 2012 there was the issue of home deliveries? A: Yes. Q: So when you entered into these negotiations for the May 2014 agreement A: Uh-huh. Q: …. You were on notice of the concerns with respect to the drivers in relation to what is referred to as home deliveries, do you agree with that proposition? A: Yes. Q: And it's true, isn't it, that some of the drivers had some issues with the home deliveries, and in particular how much they were getting paid for the home deliveries? A: At that time that was not a big issue. Q: It was not a big issue, why was it not a big issue, sir? A: Because the frequency wasn't there, it was very rare….. Q: And the intent of the drivers' committee, and I'm only asking you this from the perspective of the drivers' committee, is that you wanted a degree of certainty as to the rates for the three year term, correct? A: Yes. Q: And therefore you locked in those rates knowing that they would be the rates for the three years of the term, correct? A: Yes. Q: And putting back your own hat on, you were happy enough to provide services under those rates? A: At the time of signing this, absolutely. Q: Yes, and do I take it, sir, from that comment, that at some stage you decided that you were not happy to provide services applying those rates? A: That's correct. Q: And do you want to tell this Commission when that occurred in your own mind, sir? A: With the increased frequency of home deliveries, for one, so once upon a time maybe done one or two a week, that's fine, but when it become four or five a day, or 15 a week, it become a real issue. I was also happy to provide those services at that cost while the boxes were at the size they were at the time I signed the contract. The boxes were increased in size, the boxes were increased in weight after that. That's another issue that wasn't brought up but we still provided that service. They also changed start times after this contract was signed, which also added cost to my business, so I've not got larger boxes, heavier boxes, later start times and an increased frequency in home single drop deliveries which were not there at the time of signing this contract…. COMMISSIONER: Was it gradual, was there a certain date when this happened? A: Okay, yes it was gradual. The first time home deliveries were raised as a concern, along with some of the other issues, was in a formal meeting in January 2015. 1. I note Mr Sherwood's statement which confirmed that there had been a measurable increase in home deliveries. I accept that the home deliveries increased markedly when .com sales were conducted. 2. I also accept that there was an increase in box sizes since the agreement was negotiated but not too much turned on that point. 3. I further accept that the nature of the run involved a set run in relation to commercial addresses and quasi courier when it came to home deliveries. 4. The "Acknowledgement" signed by Mr Ding allowed the respondent to terminate the agreement prior to its expiry date, without payment of compensation, under certain conditions. 5. The Agreement made provision for early termination of the agreement by the provision of two weeks' notice for a material breach of the agreement by the applicant but only after an opportunity was provided to the driver to rectify the breach. 6. There is no doubt that there was a material breach of the agreement by Jalisco Holdings Pty Ltd. 7. There was also no doubt that two meetings, described by the parties as cordial, were held to discuss the two issues of concern and responses were provided. There was no dispute that the issue of "wrong routes" was parked pending the 3rd quarter of 2016. The Drivers' Committee was to report back to the other drivers in relation to the issue of home deliveries. One would expect that a response would be communicated to the respondent and the matter escalated up the chain if the respondent's response at any particular level of management was unacceptable. There is no dispute that the grievance was not escalated beyond Step 1 of the Resolution of Disputes procedure. 8. The response was a stoppage by 42 drivers outside the gate over three days. It came to the attention of Mr Neave, National Transport Manager who became involved in co-ordinating the respondent's response to the stoppage. Neither the drivers nor the Union sought his involvement in the disputed matter as is required by the Resolution of Disputes clause. Nor did Mr Neave make any attempt to involve himself in direct discussions with the drivers in accordance with Step 2 of the Resolution of Disputes procedure. 9. Suffice to say that the matter was not escalated by the drivers or the TWU up to the Vice President, Supply Chain, Australia and New Zealand as required by Step 3 of that procedure. 10. It is a crying shame that the parties did not see fit to follow the procedure set out in that clause as it provided for non-binding mediation and/or for conciliation by the Commission. While I accept that the drivers may have been exasperated by the issue in dispute, it had been going on for a long time and a few more days would not have made much difference, particularly as it had minimal impact on most of the drivers, including Mr Ding. 11. It was not disputed that the drivers were in material breach of their Agreement. The said agreement required the payment of two week's pay in lieu of notice and I order accordingly. 12. Mr Ding is married and has a 15-year old dependent son. During cross-examination, he admitted that he had not applied for other work since his termination. Later, again during cross-examination, he contended that he had made telephone enquiries with respect to job vacancies. His family was being supported by his wife's income from her work as a Receptionist. 13. Mr Ding contended that he purchased his vehicle at an auction for the sum of $65,000. He sold it during week commencing 25 July 2016 for the sum of $10,000. 14. In the six months prior to the termination of his agreement he earned approximately $51,775 including GST. 15. In determining whether there was any unfairness in the decision to terminate Mr Ding's engagement, I have balanced the following factors: * Mr Ding entered into the Agreement to provide transportation services in or around May 2014; * He incurred the costs associated with setting up a company, purchasing a vehicle and providing a mobile telephone when he successfully applied for a position of Contractor Driver with the respondent; * He signed the various acknowledgements described above; * He had not been a member of the Drivers' Committee but had experience in relation to a number of previous stop work meetings; * The Drivers' Committee was aware, during those negotiations, of the requirements of the respondent that, from time to time, drivers were asked to deliver cartons to a residential area within their run; * He had not noticed any difference in the number of home deliveries until early 2016 when the Staples.com sales were on. The evidence indicated that there were only two such sales since the agreement was re-negotiated; * There were fixed rates of pay for delivering parcels irrespective of whether they were a home delivery or commercial delivery; * He found out about the respondent's position in relation to both issues prior to the vote being taken on 20 April 2016 to commence industrial action * He had made a conscious decision to withdraw his services along with the collective group; * He had read and understood the first text message from Mr Neave and decided to ignore both the request to return to work and the warning contained therein; * He had also read and understood the second text message from Mr Barlow and decided to ignore both the contents and the direction to provide transportation services; * It was his decision not to enter the site and perform transportation services; * He acknowledged that the situation was getting serious by the time the third message was received yet he chose to ignore the obvious potential consequences of his actions believing that the respondent was not "serious"; * He understood the clear message and the very clear and unambiguous threat and what he had to do to avoid the threat resulting in a termination of his agreement, yet he chose to ignore the contents of the third message thinking that the respondent was not "stupid enough to terminate everybody's contract"; * He was very much apprised of the potential consequences of his actions by the time he received the fourth message and understood that termination of his agreement was a very likely outcome. He chose to ignore that message; * Mr Ding was not approached by Mr Barlow over the ANZAC day long weekend to re-join the fleet even though he considered himself to be one of the respondent's best drivers and had never received any warning letters. By the same token, Mr Ding did not take up the invitation to contact Mr Barlow to attempt to re-negotiate his contract; * Mr Ding had not obtained alternative work. During cross-examination, he admitted e inthat he had not been seeking alternative employment. Later, during cross-examination, he contended that he had made a few telephone enquiries. He was seeking work close to his home. In the interim, he worked as a volunteer driver for St George's Autism School for two days and found it stressful; and * He clearly understood the consequences of his actions. 1. The respondent did not provide any evidence to refute that given by Mr Ding in relation to the difficulties he experienced in delivering residential parcels on his run. 2. Mr Ding did not take steps to mitigate his loss by taking up the offer of seeking an interview with Mr Barlow. He provided the following excuse during cross-examination: Brown: You knew that other drivers were having discussions with Mr Barlow? Ding: After you talking the court, yeah you. Q: Okay A: Yeah Q: You agree that that was going on? A: Yeah yeah but I didn't. Q: And you didn't okay okay? A: I didn't. Q: And I said to you that you chose not to for personal reasons? A: Yeah, you can say that. Q: Okay. A: You can say that. Q: And that's your choice, isn't it, sir? A: I didn't go back to work because they'd not solved the problem. If they do solve the problem I would've go back to them (sic). Q: But you did not take up the opportunity to contact Mr Barlow did you? A: I didn't because they didn't provide me with any further issues, such as wait and watch for such issues is solved (sic). They didn't. Q: You chose for personal reasons not to contact Mr Barlow correct? A: Yes. Q: And you knew that in not contacting Mr Barlow there was no opportunity for you to have a discussion with Mr Barlow about the possibility of fixing the problems that you're talking about? A: They're never going to. 1. On balance, the termination of the agreement with Jalisco Holdings Pty Ltd was unfair. Nevertheless, the compensation that would be payable to Mr Ding would need to have regard to the matters taken into consideration above. ORDER 1. Staples Australia Pty Ltd shall pay to Mr Richard Ding a sum equivalent to five weeks' pay calculated on the basis of the weekly wage allocated to him by Jalisco Holdings Pty Ltd. 2. The payment is to be made within 14 days of today's date. 3. Matter No 2016/155569 is hereby concluded. I. TABBAA 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: 18 May 2018