Queensland Services, Industrial Union of Employees v Logan City Council (No. 2)
[2018] QIRC 69
•11 June 2018 (No. 2)
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
| CITATION: | Queensland Services, Industrial Union of Employees v Logan City Council (No. 2) [2018] QIRC 069 |
PARTIES: | Queensland Services, Industrial Union of Employees v Logan City Council (Respondent) |
CASE NO: | D/2017/69 |
PROCEEDING: | Arbitration of industrial dispute |
DELIVERED ON: | 11 June 2018 (No. 2) |
HEARING DATES: | 31 October 2017 (Mention) |
HEARD AT: | Brisbane |
MEMBER: | Deputy President Swan |
| ORDERS | 1. The Application is dismissed. |
| CATCHWORDS: | INDUSTRIAL DISPUTE - ARBITRATION OF AN INDUSTRIAL DISPUTE - Whether the provision of a motor vehicle constituted a term of the employee's contract of employment - Found that the provision of a motor vehicle to employee was not a term of the employment contract - The motor vehicle was provided under a standard lease agreement - The lease agreement contained a clause which required either party to withdraw from the agreement within a specified period of time - Application dismissed. |
LEGISLATION: CASES: | Industrial Relations Act 2016 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) HCA 24; 149 CLR 337 Byrne and Frew v Australian Airlines Limited [1995] HCA 24 |
| APPEARANCES: | Ms M. Robertson of the Queensland Services, Industrial Union of Employees, on behalf of Mr Brian Welsh. Mr R. Beer of the Logan City Council, the Respondent. |
Reasons for Decision
The Application before the Commission involves the arbitration of an industrial dispute pursuant to s 262(3)(b) of the Industrial Relations Act 2016 (the Act).
The Queensland Services, Industrial Union of Employees, on behalf of Mr Brian Welsh (the Applicant), set out the details of the matter for arbitration as follows:
·Mr Welsh is employed by Logan City Council (the Respondent) as a Building Compliance Officer.
·Mr Welsh has, as a condition of employment since his commencement with the Respondent in 2008, the use of a vehicle. This was recorded by way of a lease.
·On 24 March 2017, the Respondent advised Mr Welsh that the vehicle would be removed from private use.
·The Applicant wrote to the Respondent on 20 June 2017, outlining that the vehicle use was an entitlement and requested that the Applicant be informed of the Respondent's willingness or otherwise, recognising the entitlement.
·The Respondent advised on 26 June 2017 of its intention to continue with the termination of the arrangement.
·The Applicant notified the Respondent of an industrial dispute on 5 July 2017.
·The Respondent advised that it intended to remove the vehicle use on 23 August 2017.
Witness evidence
Witnesses for the Applicant were:
·Brian Welsh; the Applicant
Witnesses for the Respondent were:
·Brian Joseph May; and
·John Patrick Rodriquez
The Vehicle Lease documents
The following largely sets out the history of the leasing arrangements between Mr Welsh and the Respondent as provided for by the Respondent.
Under the heading "Logan City Council Vehicle Leasing Agreement - An Agreement made between Logan City Council and Mr Brian Welsh" dated 21 July 2008, Mr Welsh entered into a Lease Agreement (the Lease Agreement). Under clause 1 of that agreement at "General Conditions", the vehicle:
The vehicle is and shall at all times remain the property of Logan City Council during the period of the Agreement.
In addition Mr Welsh signed an "Application for Vehicle Lease (Permanent)", (the 2008 application) also dated 21 July 2008.
The 2008 application states that:
· Mr Welsh was on a Level 2 (L2) - Private (no annual leave use) lease; and
· the business justification for applying for the vehicle states:
(1) Brian Welsh will be conducting inspections to and from the office as a matter of operational efficiency. (2) Lease Back Vehicle is part of the package required to attract officers with these qualifications.
On 27 March 2009, Mr Welsh signed another application for vehicle lease for the purposes of a replacement vehicle (the 2009 application). In the approval of that application, Mr Welsh retained the L2 lease in relation to the use of the motor vehicle. However, the noted business justification for applying for the vehicle was:
Replacement vehicle per Building Surveyor. Vehicle is provided as part of Mr Welsh's salary package.
On 27 May 2010, Mr Welsh was advised by Mr Ellis (People and Culture Manager) that his position of Building Surveyor was to be redeployed from the Development Assessment Branch of the Building Compliance Unit to meet the business needs of the Respondent. The redeployment was to be effective as from 1 July 2010. On 12 May 2011, Mr Welsh was appointed to the position of Building Compliance Officer with the Standards Branch.
On 24 May 2017, Mr Welsh was advised by Mr Ball (Acting Development Assessment Manager) that given the changing needs in the business areas of the Council, the Council was providing Mr Welsh with the required 90 days' notice under clause 16 of the Lease Agreement for the return of the vehicle he had been using under the vehicle leasing scheme. The 90 days ended on 22 August 2017.
The Respondent added that the Lease Agreement was not subject to any type of salary packaging/salary sacrificing agreement as contained in clause 5.4 "Salary Packaging/Salary Sacrificing" of the Certified Agreement and the Management Directive - Salary Packaging/Salary Sacrificing.
Applicant's primary submissions
Mr Welsh's employment is subject to the applicable Logan City Council Certified Agreement.
The Applicant does not dispute the factual commentary provided by the Respondent as it relates to various dates of agreements entered into by the Applicant and Respondent.
By 24 May 2017, when the Respondent advised Mr Welsh that the vehicle use would be removed from him, the Respondent had also advised that vehicle was to be redirected to a different operational area. That correspondence stated that the vehicle lease was a voluntary arrangement which could be terminated with notice. The Respondent provided the Applicant with $4,505.00 as a gesture of good faith to recognise the inconvenience caused to him.
The Applicant wrote to the Respondent on 20 June 2017 outlining that the vehicle use was a continuing entitlement and requested that the Applicant be informed of the Respondent's willingness or otherwise of recognising the entitlement.
The primary claim of the Applicant is that he has a continuing entitlement to the use of the vehicle as it is a fundamental element of the employment contract which cannot be unilaterally altered. That benefit has no termination provision.
Witness Evidence
Mr Brian Welsh said he was interviewed for the position of Building Surveyor by Mr Brian May (Building and Plumbing Service Coordinator), who is now longer employed by the Respondent, but who was called to give evidence.
During that interview, the Applicant advised Mr May that he was then living on the Gold Coast and the issue of a vehicle was discussed due to the distance which would be required to travel to his new workplace. He advised that Mr May said that a vehicle with personal use would be provided to him as part of his salary package. The Applicant stated that he was made aware that the vehicle allocated to him would be used during the day by Council employees as part of the carpool at the workplace [T3-17]. Also at the time of that interview, the Applicant advised that he had "cold called" the Council enquiring about work and that he had never filled out an application form to work at the Council and his interview and subsequent employment would be categorised as that as a "late applicant". [T3-18]
In cross-examination, the Applicant said that during the course of receiving communication from the Council concerning his appointment, there had been no reference made to the vehicle as constituting the terms and conditions of the Applicant's employment.
Notwithstanding that, from 2008, when the Applicant received his vehicle lease documents, it stated that the vehicle lease was part of his salary package and this was repeated in his 2009 application. [Exhibit 1 (Affidavit of Mr Welsh), point 4]
Since that time there had been a number of new leases issued and the Applicant's contribution to the lease had also increased over time.
On 24 May 2017, the Applicant was advised that the vehicle use was being withdrawn. [Exhibit 1, (Affidavit of Mr Welsh), Attachment 2]
Attachment 2, is correspondence sent from Mr Stephen Ball (Acting Development Assessment Manager). Inter alia, that correspondence provides:
In March, the Development Assessment (DA) Manager David Hansen advised the DA Branch about the need to ensure our branch is well positioned to embrace the opportunities that Mobility provides in driving the future direction of our business with a view to dramatically increasing our capability to service our customers in the field. A key component of unlocking this potential was understanding how our existing DA Branch vehicles are used and making sure that the shifting needs of the Branch are being met…
… As a result your level 2 lease vehicle has been identified as not fulfilling the optimisation requirements of the branch and will be redirected to one of the above mentioned operational teams to enable the branch to enhance its Mobility objectives…
Council's vehicle lease scheme is offered to staff across the organisation and engagement in the vehicle leasing scheme is voluntary in exchange for the incumbent paying a vehicle leasing fee commensurate with the level of lease being provided. In accordance with the attached Vehicle Scheme management directive, Council has the right to terminate a vehicle arrangement by providing 90 days' notice in writing…
Whilst the aforementioned Management Directive only requires Council to provide you with 90 days' notice, please be advised that Council recognises the inconvenience caused to you in the removal of your voluntary lease vehicle and has therefore elected to provide you with compensation to the value of $4,505 gross. This amount is equivalent to 50 per cent of the car allowance value provided to Program Leaders across Council and will be provided to you as a gesture of good faith.
The Applicant said that when he was redeployed to the position currently held, he was assured in writing that he would suffer no loss of conditions or employment. In correspondence dated 27 May 2010, Mr Mike Ellis (People and Culture Manager) advised inter alia that:
In accordance with Council's Certified Agreement 2009 at Part B "Managing Organisational Change" and Clause 8.5 Notification of Change, your redeployment will not result in the loss of any current terms or conditions of your employment. [Exhibit 1 (Affidavit of Mr Welsh), Attachment 3]
The Applicant states that his understanding as to the provision of a vehicle in his current terms or conditions of employment stemmed from:
… my interview in 2008, my letter of redeployment in 2010, and my signing of new leases throughout the entire length of my employment with Logan City Council. [Exhibit 1, point 10]
Mr Brian May had previously worked for the Council from August 2007 until April 2011. He states that he did not have authority in his position to make or approve matters relating to employment contracts or the composition of a salary package. [Exhibit 7, point 5]
In examination in chief, Mr May said when questioned about vehicle lease arrangements:
… well, most of them were there when I took the position and I - and they did have, I think leased vehicles and I think any of the new positions that came up, and I - probably Mr Welsh's position, that position would probably have been offered with a private lease vehicle. [T3-43]
Mr May did not recall the Applicant or any meetings which had occurred. However, he was confident that he would "not have offered anyone a motor vehicle" [T3-45]. He stated that:
… there may have been a motor vehicle attached to that particular position at the time that his - that it was offered to him, but it would not have been offered until such time as the selection committee had finished and the CEO, General Manger, whoever it was, had signed off on the - on that selection report. [T3-45]
Mr May said that the vehicles in the Council were offered on a lease-back arrangement as is the case in the public sector and he found the requirements within the Council were "pretty standard". Mr May said he had always had a lease-back vehicle when working for the Council [T3-45]. If any terms of the agreement that accompanied the lease-back vehicles was flouted, then the CEO or the General Manager of the Council could immediately cancel that lease. He also said that the lease could be cancelled on one month's notice from either party.
Mr May was shown a copy of the Application for a Vehicle Lease (Permanent) dated 21 July 2008, upon which he had written:
(1) Brian Welsh will be conducting interviews to and from the office as a matter of operational efficiency. (2) Lease back vehicle is part of the package required to attract officers with these qualifications. [Exhibit 5]
Mr May did not recall the communication, but surmised that it might have been done on the basis of "we need to find some justification" for providing a vehicle lease for the type of position they had offered the Applicant. In referring to the lease agreement, Mr May said:
This is an application to lease a vehicle, and it would only be filled out if the position that had been offered to Brian Welsh came with the option of a vehicle and that - it was always an option. It was never - it was never you had to take it. It was always, you know "Would you like to also have a lease-back vehicle?" I mean, I accepted mine, but I know other people knocked it back because it didn't suit them. [T3-51]
Mr John Rodriquez is employed at the Council as a Human Resources Business Partner. In 2008, he was employed as a Workplace Planning and Recruitment Coordinator.
Mr Rodriquez explained the selection process undertaken by the Council during 2008. He said the process required the requesting Manager to submit a memorandum to the People and Culture Branch requesting the recruitment of a position. The recruitment officer would draft an advertisement for management approval and then if approved the position would be advertised both internally and externally. The position description identified the level of classification, remuneration paid and:
… if it was a vehicle that required the deputy CEO to approve and authorise the advertising or allocation of a vehicle with the job, then that would be included in the memo requesting the role be advertised. [T3-54]
The selection process involved a chairperson of the panel, (usually the supervisor of the role), one recruitment officer and usually a technical expert in the role to constitute the panel of three. After the panel examined all of the documentation, a preferred candidate for the position was chosen. This panel would consider the terms and conditions of the offer and review all the investigatory processes (for example reference checking) and if all was satisfactory then the matter was referred to the CEO for approval before an offer could be made.
Confirmation was required from the CEO to see if a vehicle was attached to the position.
When reviewing the actual document drawn for the Applicant, it was seen that a vehicle lease was not part of the panel report. Also noted was the Applicant's signature on the form accepting the formal offer.
Mr Rodriquez said that, in the letter of offer to an employee, if a prospective employee was to be involved in the leasing scheme, the detail would have been listed in the summary of key positions in the document. In the case of the Applicant's letter of offer, there was no request for authorisation for a vehicle in that letter and further the panel report did not mention the provision of a vehicle [Exhibit 3]. Mr Rodriquez said that if the provision of a vehicle was part of the salary package on the appointment or the Applicant, there would be some documentation to that effect.
Mr Rodriquez commented upon the type of arrangements which could be offered by the Council regarding salary packaging under the Certified Agreement. Under the Certified Agreement, any employee at any level could choose to salary sacrifice some of their salary to have a vehicle on a novated lease arrangement. Another type of agreement relates to whether there is a business need for a vehicle to be provided or it is part of an employee's negotiated contract of employment where the Council would sign the lease with the employee allowing them to use the vehicle but also where the Council could use the vehicle and charge the employee a lease fee as a contribution to offset the Council's exposure to fringe benefit tax.
Mr Rodriquez was clear that vehicles could only be approved by the CEO. The selection panel's Report did not state that the Applicant's position offered a private use of a vehicle.
What was provided to the Applicant in the letter of appointment was a provision for the employee to partake in the Council's Vehicle Lease Scheme. That meant that the employee would have been offered the vehicle lease option during the recruitment process. Mr Rodriquez said that was the process adopted by the Council at that time.
Ms Ezzy (Administration Manager, Organisational Services) communicated with Mr Rodriquez during 2008 enquiring as to whether there existed any special arrangements in relation to the allocation of a vehicle to the Applicant as the application for a vehicle lease indicated the lease was part of his package. Mr Rodriquez advised that he had not received any requests or authorisation regarding a lease as the letter of appointment and panel report were silent on the issue.
Mr Rodriquez detailed the type of lease arrangements that the Respondent may offer an employee. These included:
·Level 1 - The vehicle is provided for commuter use, which permits the driver to take the vehicle to and from their place of work but where no other use of the vehicle outside of work was permitted other than for business related use such as call outs.
·Level 2 - The lessee has full private use of the vehicle other than when the lessee is on leave at which time they must return the vehicle to Council.
·Level 3 - Allows the lessee to have full private use of the vehicle. However the Council would not provide fuel or oil during periods of leave.
·Level 4 - Permits the lessee the full private use of the vehicle and Council provides fuel and oil during periods of leave. [Exhibit 9]
Mr Rodriquez said that the Applicant had not participated in the Council's salary packaging/salary sacrificing arrangements.
When considering the copy of the Applications for Vehicle Lease (Permanent) dated 21 July 2008 and 27 March 2009 and having read the section entitled "Business Justification" on the application, Mr Rodriquez stated that "it is difficult to control what is written by an individual on the applications. The form is filled out by the applicant as they are authorising the deduction of a lease fee from their pay. That form is then given to the Manager to sign. Despite the wording "business justification" section of the application, the Applicant's salary package did not include the vehicle lease. He understood that vehicles were not considered to be part of an employee's salary package if they chose to novate a lease. He said that it was an employee benefit available to all staff, where they can realise a tax benefit by taking up a novated lease with an external leasing provider, facilitated by the Council.
Mr Rodriquez held the view that what was offered to the Applicant upon appointment to the Council was a standard leasing agreement, and nothing more.
Consideration of the Evidence and Conclusion
The primary submission of the Respondent is that the vehicle lease agreement was terminated in accordance with the terms of the agreement. The Applicant has not provided evidence to support his argument that the Lease Agreement was intended to form part of his employment contract.
In Codelfa Construction Pty Ltd v State Rail Authority of NSW[1] the High Court, Mason J, when considering the matter of implied terms, stated:
[22]The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking, facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although as we have seen, if the facts are notorious, knowledge of them will be presumed.
…
[24]Consequently, when the issue is which of two or more possible meanings is it to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of these matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.
[1] (1982) HCA 24; 149 CLR 337
Further, in Byrne and Frew v Australian Airlines Limited[2] the High Court considered whether an:
Implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties.
[2] [1995] HCA 24
The Respondent contends that this matter involves the consideration of two factors:
(i)A verbal offer made by an employee of the Respondent, Mr Brian May, at the time of recruiting Mr Welsh in 2008 that, in order to secure his employment, he could enter into a vehicle lease agreement and the vehicle would form part of his salary package; and
(ii)Contemporaneous notations made on two application forms, completed in 2008 and 2009 respectfully, when Mr Welsh was applying for a vehicle lease. [Respondent's submissions, point 31]
Whilst the Applicant submitted that the vehicle formed a condition of Mr Welsh's employment and thereby could not be altered unilaterally, the Respondent submitted that there were no express terms in Mr Welsh's employment contract or in the Certified Agreement which related to the Lease Agreement. The Lease Agreement contains a provision to terminate the agreement and when that occurs, the right to use the vehicle ceases.
While the Applicant submits that Mr May made a verbal offer that the vehicle formed part of the terms and conditions of the employment contract, the Respondent says that had such an offer occurred, it would have been found in Mr Welsh's recruitment documentation and his employment contract and would have been required to have been authorised by the appropriate Manager. This had not occurred.
The Respondent submits that the Applicant seeks to rely on two contemporaneous notes made in the 2008 and 2009 applications. The Respondent says that the 2008 and 2009 applications do not form part of the Lease Agreement or the employment contract as they are simply administrative forms which are completed to outline the particulars of the vehicle and lessee required to complete the Lease Agreement [Respondent submissions, point 3.6]
It added, that if the Lease Agreement was intended to form part of the Applicant's employment, the Applicant would have been offered the opportunity to partake in the Respondent's salary package/salary sacrificing arrangements in accordance with the relevant management directive and the Certified Agreement. This had not occurred and Mr Welsh's vehicle formed part of the car pool where other employees could use that vehicle. The Respondent's submissions on this point are accepted when one considers the documentation provided to the Commission.
Clause 17 of the Lease Agreement states that the Respondent has the right to retrieve the vehicle if the employee's position has changed and there is no longer a requirement for the vehicle to be used.
It is clear that the Respondent had the ability to exercise its rights in accordance with the Lease Agreement. The Respondent implemented the terms of the Agreement to utilise the vehicle where it was deemed necessary.
The view held by Mr Welsh that an implied term of his employment contract existed whereby a vehicle would always be provided to him by the Respondent, is erroneous. I have accepted that the Respondent had a mandatory regime and protocol whereby any alterations to an employee's contract of employment required supervision and approval at a senior Managerial level as provided in evidence by both Mr May and Mr Rodriquez. That process had not occurred in Mr Welsh's case. The administrative forms submitted by Mr Welsh and the notations thereto do not infer or constitute any adjustment made by Management to Mr Welsh's contract of employment. The terms and language of the Lease Agreement are unambiguous (see Codelfa Construction Pty Ltd v State Rail Authority of NSW[3]).
[3] (1982) HCA 24; 149 CLR 337
The Application is dismissed.
Order accordingly.
0