Linfox Armaguard Pty Ltd T/A Linfox Armaguard Pty Ltd v Transport Workers' Union of Australia
[2019] FWC 6891
•7 OCTOBER 2019
| [2019] FWC 6891 [Note: a correction has been issued to this document] |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Linfox Armaguard Pty Ltd T/A Linfox Armaguard Pty Ltd
v
Transport Workers’ Union of Australia
(C2018/6051)
| Commissioner Gregory | MELBOURNE, 7 OCTOBER 2019 |
Alleged dispute about any matters arising under the enterprise agreement.
Introduction
This matter concerns a dispute about crewing on the armoured vehicles operated by Linfox Armaguard Pty Ltd T/A Linfox Armaguard Pty Ltd (“Linfox Armaguard”) at its Essendon depot. At the time the dispute notification was lodged there were eleven employees at the Essendon depot who continued to be part of three-person crew operations. The remaining vehicles operate with two-person crews. Linfox Armaguard now wants to have two-person crewing in all vehicles, and claims there are no operational or other reasons to prevent this from occurring.
However, the Transport Workers’ Union of Australia (“TWU”) is opposed to these changes. It claims that the employees who remain involved in three-person crewing do not want to move from these arrangements. It also relies on the content of a letter from a former Armaguard Manager, which listed seventeen employees, and indicated that they would continue to work as part of three-person crews. Eleven of those employees are apparently still employed by the business.
The dispute was dealt with in conference on 28 November 2018, but was not able to be resolved. The parties were then involved in further direct discussions, however, Linfox Armaguard subsequently requested that the dispute be set down for arbitration as it was still not resolved. The Commission accordingly issued directions for filing and service of evidence and submissions and the matter was dealt with in a hearing on 29 May 2019.
Ms T. Finn of Justitia Lawyers and Consultants was given permission to appear on behalf of Linfox Armaguard under s.596(2)(a) as the matter involved a degree of complexity and her involvement might enable it to be dealt with more efficiently. Mr J. Cooney appeared on behalf of the TWU.
The Evidence and Submissions
Linfox Armaguard
Mr Dale Watkins
Mr Dale Watkins is the Currency Centre Manager for Linfox Armaguard at the Essendon depot. He indicated in his evidence that three-person crewing is unique to that depot, and does not exist at any other Linfox Armaguard location in Australia. In addition, there are no particular factors associated with the operations of the Essendon depot that necessitate three-person crewing, and he understood these arrangements only remained in existence because of what he described as “the 2008 letter.”
He also understood that the standard crewing arrangement moved from three-person to two-person crewing in 2008, and at that time the employees who moved to the two-person crews became eligible for a flexible crewing allowance. However, at some later point the employees listed in the 2008 letter also began receiving the flexible crewing allowance, despite remaining in three-person crews. This caused some tension with other road crews. Mr Watkins also indicated in his examination-in-chief that he first became aware of the so-called 2008 letter in 2015, but was not aware of the circumstances that led to it being created.
Mr Watkins said he has extensive experience of working in the cash in transit industry, and has a good understanding of the necessary safety requirements. He considers that two-person crewing is a safe mode of operation, and there were no additional operational risks associated with that mode of crewing. He indicated in conclusion, “Given the decline in the use of cash in Australia and the consequent grave financial pressures on the business, in 2018 Armaguard decided it could no longer afford three person crewing and commenced discussions with the staff to abolish this unique long standing arrangement.”[1] He also confirmed in cross-examination that the financial pressures on the business were the overriding reason why the Essendon depot was looking to move to only two-person crewing.
Linfox Armaguard’s Submissions
The parties are now covered by the Armaguard Road Crew (Victoria) Enterprise Agreement 2018.[2] Clause 27 “CREWING” relevantly states at sub clause 27.1 and 2:
“27.1 Upon the inclusion of the Flexible Crewing allowance in base pay, the standard method of crewing, allowing for provision of appropriate vehicles, shall be two person crewing, generally with two people out, except where noted in the Security Site Survey or for Operational reasons as determined by the company.
27.2 The Vehicle standards for 2 person out shall be:
·GPS or other vehicle locating system, including vehicle immobilisation and duress systems.
·Vehicle access systems that limit access to authorised personnel only.
·Communications system
·Vehicle locking systems
·External access to transfer safe (if applicable)
·Written operational procedures and associated training.”
The only mention of three-person crewing is in sub clause 27.7.3. It contains a dispute escalation process to apply when a road crew employee believes a particular site is not suitable for two-person out crewing. It sets out time limits for dealing with any such dispute and indicates that if the time limits are not met a two-person crewing operation shall revert to a three-person operation until the dispute is resolved, providing neither party has unreasonably delayed the dispute resolution process.
Linfox Armaguard continues to submit that three-person crewing at the Essendon depot ceased in 2008, apart from those employees named in the letter, and it has continued to roster the named employees in accordance with this arrangement since 2008.
However, the decline in the use of cash has placed significant financial pressures on the business and it is now looking for ways to reduce its costs. It decided last year that it could no longer afford to continue three-person crewing arrangements and commenced discussions with its employees to abolish this long-standing arrangement. It also submits that the operational reasons referred to in the 2008 letter no longer exist, and there are no safety or other reasons that prevent the business from moving to two-person crewing as the standard method of crewing, as provided for in the Agreement.
Linfox Armaguard also acknowledges Mr Gusman’s experience, and the safety concerns he refers to in the evidence provided on behalf of the TWU, but submits that there is nothing inherently unsafe in two-person crewing. It continues to submit that the evidence of Mr Watkins, who has extensive knowledge about the safety and operational requirements for two-person crews, should be preferred.
Linfox Armaguard also rejects any suggestion that the content of the so-called 2008 letter has become a custom or usage, and the circumstances involved do not satisfy the necessary requirements to be accepted as a custom and usage, which requires that they be obvious on their face and so well-known and understood as to be notorious. It also submits that there is a degree of confusion and uncertainty about when the letter was created, and whether it was only confined to CBD operations or was intended to otherwise operate more broadly. There was also no clarity in the letter about what were the “operational reasons” referred to. The letter also contradicts an express term in the 2018 Agreement, which indicates that two-person crewing is to be “the standard method of crewing.”
The same provisions have also been part of the three previous enterprise agreements negotiated between the parties, and therefore the terms of the letter should not be implied into the arrangements that apply to the employees. In addition, any operational reasons that might have existed at the time the letter was written no longer exist, and it is not appropriate for the arrangements set out in the letter to remain in place.
The TWU
Mr Richard Gusman
Mr Gusman first worked with the Linfox Armaguard business in 1990 and has been employed as a security officer and armoured vehicle operator since 2001. He indicated that the 1997 enterprise agreement was the first to make provision for two-person crewing, however, he understood at the time that employees would not be forced to move to two-person crew operations, and could remain on three-person crewing unless they chose to relinquish that right. An allowance was subsequently established for those employees that did move to two-person crew operations.
Mr Gusman also attached a copy of the so-called 2008 letter to his witness statement. It has a handwritten date of 10 November 2008, and states under the heading “3 PERSON VEHICLES AT MELBOURNE CURRENCY CENTRE”:
“This letter is to confirm our discussions that following the registration of the 2008 Road Crew Collective Agreement, for operational reasons the following people (in no particular order) will continue to be used on three person runs.”[3]
It then continues to list the names of seventeen employees, with one additional handwritten name added as well. It concludes by stating:
“Where, as a result of a work-related injury an employee produces a valid doctor’s certificate indicating his or her inability to perform 2 person crewing, Armaguard shall transfer that employee to 3 person truck work where available.
Yours sincerely
Dennis Price
Southern Regional Manager”[4]
Mr Gusman understood that these arrangements meant that the employees listed in the letter could never be forced to move to work on two crew vehicles and were entitled instead to remain as part of three-person crewing arrangements. However, he also indicated in cross-examination that he was not involved in the discussions that led to the letter being written, and was not aware of what were the “operational reasons” referred to in the letter. He also indicated that while he understood the letter existed he had only been shown a copy of it relatively recently.
Mr Gusman also indicated in his examination-in-chief that he had worked on two crew vehicles in the past for a period of around 12 months, on the basis that he was able to revert to three-person crewing if he didn’t feel comfortable with the two-person operation. He subsequently decided to move back to a three-person crewing because he believed it provided a safer working environment, primarily as a consequence of the driver remaining in the vehicle. He also understood that three-person crewing was now in place in Sydney, although he also acknowledged in cross-examination that it primarily operated on the basis of two-person crewing with a third person in a support vehicle. Mr Gusman also indicated in his evidence that he was on duty in 1995 when a colleague on another vehicle was shot and killed. However, he also acknowledged that there were a greater number of security incidents at that time, and the numbers have now dramatically decreased.
The TWU’s Submissions
The TWU submits that there are eleven employees listed in the letter signed by Mr Dennis Price who remain employed by Linfox Armaguard. Their entitlement to work on three-person crewed vehicles has accordingly become a usage and this restricts the management prerogative of the business to otherwise move them to two-person crews. It relies on the High Court decision in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd[5] (“Con-Stan”) in support of this submission.
It continues to submit that the current practice of having certain identified employees working on three crew vehicles has been in place since 1997, and it has become an implied term of the contract of employment for those named employees. This accordingly restricts the exercise of managerial prerogative and it relies on the decision of Deputy President Sams in Steenstra v J.J. Richards & Sons Pty Ltd[6] in support of this submission. It continues to submit that there is nothing in the 2018 Agreement that supports or allows a unilateral change to these arrangements, and it would be unreasonable to unilaterally bring to an end the existing three-person crewing operations.
The TWU also submits that there are good operational reasons to maintain the existing three-person crews because they are a safer mode of operation.
Consideration
In coming to a decision in this matter it is acknowledged at the outset that some long-standing Linfox Armaguard employees, including Mr Gusman, are of the view that three-person crewing of vehicles is a safer mode of operation and, as a consequence, want to remain in three-person crewing operations. It appears that these views have been influenced, in large part, by some of the unfortunate events that occurred in the cash in transit industry in the past. Fortunately, these events now occur much less often. It also appears that the desire to remain part of three-person crewed vehicles has come at some cost for those employees as they did not initially receive the allowance that was established for employees working on two-person crewed vehicles. It also appears that they were not able to access some of the additional overtime that was more often provided to employees working on two-person crewing.
However, despite the views that might be held by some employees about the merits or otherwise of different crewing arrangements the Commission is not required, in the context of the present application, to determine this issue. It is noted, however, that while some employees might have a preference to work in three-person crewed vehicles, there is no evidence before the Commission at this time to suggest that two-person crewing is inherently a less safe mode of operation.
As indicated at the outset what the Commission is required to determine, in the context of this application, is whether there is an existing custom and practice, or usage, in place in respect of some employees working at the Essendon depot that prevents Linfox Armaguard from moving those employees from three-person to two-person crewed vehicles.
In turning to determine this issue it is noted at the outset that the Agreement makes clear at sub clause 27.1 that the “standard method of crewing… shall be two person crewing, generally with two people out, except where noted in the Security Site Survey or for Operational reasons as determined by the company.”
However, the TWU relies on custom and practice and the existence of what is described as “a usage” to support the claim that the eleven employees, who continue to be employed by Linfox Armaguard and are named in what has been described as “the 2008 letter,” are entitled to remain in three-person crewed vehicles.
In dealing with this claim it is noted at the outset that there is nothing in the Agreement that makes reference to how claims of custom and practice or usage are to be dealt with.
The TWU accordingly acknowledged in its written and oral submissions that the requirement for establishing whether a custom and practice exists is to be determined in accordance with the propositions identified by the High Court in the decision in Con-Stan. That matter was concerned with a commercial dispute about the application of various insurance policies, however, the High Court identified in its decision a series of propositions to be applied in determining whether a custom and practice that is to be implied into the terms of the contract can be said to exist. It is also noted that a decision of a Full Bench of this Commission in Transport Workers’ Union of Australia v Linfox Australia Pty Ltd[7] made reference to the propositions established by the High Court in Con-Stan and concluded at [28]:
“This approach has been taken in various other decisions of this Commission and is well-understood as the correct approach for the Full Bench to rely on in determining whether the procedures provided for in the APMs are a “custom and practice” in the relevant industrial context.”
The four propositions identified by the High Court in Con-Stan are as follows (references omitted):
“(1) The existence of a custom or usage that will justify the implication of a term into a contract is a question of fact.
…
(2) There must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract.
…
“[The custom] must be so notorious that everybody in the trade enters into a contract with that usage as an implied term. It must be uniform as well as reasonable, and it must have quite as much certainty as the written contract itself.”
(3) A term will not be implied into a contract on the basis of custom where it is contrary to the express terms of the agreement.
…
(4) A person may be bound by a custom notwithstanding the fact that he had no knowledge of it.”[8]
The application of the provisions in Con-Stan were also more recently considered by Deputy President Gostencnik in the matter of Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Siemens Ltd,[9] a decision handed down in 2016. He relevantly indicated at [56] before turning to consider each of the propositions established by the High Court:
“As is evident from the decision in Con-Stan there is a high threshold to overcome before a term will be implied into a contract by reason of custom and usage.”
I now turn to deal with the present matter based on the propositions established by the decision in Con-Stan.
“The existence of a custom or usage that will justify the implication of a term into a contract is a question of fact.”
The available evidence indicates that the eleven remaining employees have for the majority of the time continued to work as part of three-person crewed vehicles. However, the evidence of Mr Gusman indicates that he worked on two-person crewed vehicles for a period of around 12 months, on the basis that he could elect to return to a three-person crewed vehicle if he chose to do so. The evidence also makes clear that it is only those eleven remaining employees at the Essendon depot who continue to work as part of three-person crewed vehicles, and the standard practice for all other employees at the Essendon depot, and at all other Linfox Armaguard depots, is to work as part of two-person crewed vehicles. The evidence accordingly makes clear that any custom and practice or usage that might be said to exist is confined to only those eleven employees.
“There must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract. The custom must be so notorious that everybody in the trade enters into a contract with that usage as an implied term. It must be uniform as well as reasonable, and it must have quite as much certainty as the written contract itself.”
As indicated, there are only eleven employees at the Essendon depot who seek to establish that a custom and practice exists. This clearly makes it difficult to conclude that everyone entering into an employment contract at that location can reasonably be presumed to have imported that term into their contract, or that the custom and practice is so notorious and well-known that everyone enters into a contract of employment with that usage as an implied term. It also cannot be said to apply uniformly.
“A term will not be implied into a contract on the basis of custom where it is contrary to the express terms of the agreement.”
As indicated previously the Agreement states at clause 27.1 that “the standard method of crewing… shall be two person crewing,” unless there are “Operational reasons as determined by the company” that justifies some different type of arrangement. Therefore, when the terms of the Agreement are viewed objectively it is evident that the intention of the parties in terms of the standard method of crewing is for it to be based on two-person crewing.
Sub clause 27.7.3 does refer to three-person crew operations, but only in circumstances where an ongoing dispute about two-person crewing exists. It can therefore be concluded that the express terms in the Agreement provide for two-person crewing as the standard method of crewing, unless it is determined for operational reasons that some other form of arrangement is appropriate. Those operational reasons are to be determined by the employer. Therefore, those employees that are seeking to have a term implied into their contracts of employment, based on custom and practice or a usage, are attempting to do so on the basis that it is contrary to the express terms of the Agreement.
“A person may be bound by a custom notwithstanding the fact that he or she had no knowledge of it.”
This final proposition from the decision in Con-Stan appears to be of limited relevance in the context of this matter.
Conclusion
I have had regard to the evidence and submissions provided by the parties in this matter in the light of the propositions identified in Con-Stan. I am not satisfied, in conclusion, that in all the circumstances the existence of three-person crewing for those eleven employees can be said to be a custom and practice, given the propositions established by the High Court. The conclusion set out above in regard to the second and the third of those propositions are of particular relevance in coming to this conclusion. The application is accordingly dismissed.
It is also noted, finally, that it remains evident that at least some, if not all, of the remaining eleven employees listed in the so-called “2008 letter” continue to have ongoing concerns about being involved in two-person crewed vehicles. Linfox Armaguard addressed this issue during the course of the proceedings, following a question from the Commission. It indicated that that there are procedures and processes in place whereby any such concerns can be dealt with and resolved. For example, there was the potential for additional training and other support to be provided in such circumstances. It can therefore be expected that any changes that occur as a consequence of this decision will be implemented in a way that takes account of these considerations.
COMMISSIONER
Appearances:
T Finn of Justitia Lawyers and Consultants for the Applicant.
J Cooney for the Respondent.
Hearing details:
2019.
Melbourne:
May 29.
<PR713057>
[1] Exhibit A1 at [13].
[2] AE501717.
[3] Exhibit TWU1 at RG – 8.
[4] Ibid.
[5] (1986) 160 CLR 226.
[6] [2015] FWC 7918.
[7] [2016] FWCFB 443.
[8] (1986) 160 CLR 226, 236-237.
[9] [2016] FWC 2041.
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