Toll Transport Pty Ltd v Transport Workers' Union of Australia

[2019] FWC 7306

[2019] FWC 7306

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Toll Transport Pty Ltd
v
Transport Workers’ Union of Australia
(C2019/557)

COMMISSIONER GREGORY MELBOURNE, 22 OCTOBER 2019

Alleged dispute about any matters arising under the enterprise agreement.

Introduction

[1] Toll Transport Pty Ltd (“Toll”) operates an Express Parcels Site at the Melbourne Airport which is involved in receiving, sorting and delivering freight. The employees work under a roster system, which provides for the regular allocation of rostered days off (“RDOs”) on the basis that they work a 40 hour week and accrue one RDO each month.

[2] The terms of the Local Agreement that applies at the Site requires Toll to publish an RDO roster for the next calendar year. This arrangement has been in place for a number of years, with a total of 12 days on the roster marked as days on which employees are not able to take an RDO. These are variously described as either “black out days” or “step days.”

[3] However, the roster published by Toll in advance of 2019 contained additional marked days. It claims these are required to improve the efficiency of its operations at the Melbourne Airport Site. However, the Transport Workers’ Union of Australia (“the TWU”), which has coverage of the employees at the Site, claims a custom and practice has been established at the Site in regard to the number of marked days, which cannot be changed without being agreed to by the employees.

[4] Toll has lodged a dispute under s.739 of the Fair Work Act 2009 (Cth) (“the Act”) claiming it is entitled to implement the new roster. The matter was dealt with in conference on two occasions, but was unable to be resolved. Toll now seeks to have it arbitrated. Ms Laura Dobson, Senior Manager – Group Employee and Industrial Relations, appeared on behalf of Toll. Mr Justin Cooney, Industrial Officer, appeared on behalf of the TWU.

The Applicant’s Evidence and Submissions

Mr Bill Rolfe

[5] Mr Rolfe is the General Manager for Victoria and Tasmania of Toll’s Express Parcels Division and has been in this role since April 2018. Toll employs approximately 240 full-time employees at the Melbourne Airport Site, who are covered under the Toll – TWU Enterprise Agreement 2017-2020 (known as the “Heads of Agreement”), and the Toll IPEC (Victorian Metro) Local Agreement, which also has application on the Site. Clause 14 of the Local Agreement contains the requirement for Toll to publish an RDO roster setting out the allocation of RDOs for the following 12 months.

[6] Mr Rolfe indicated in his evidence that the business has several peak processing times, and these are typically associated with the days immediately prior to and following public holidays. They involve the weeks immediately prior to and following Easter, and the two working days immediately prior to Christmas Day. Outbound freight levels and customer pickups can increase by approximately 10-15% at these times. In addition, the Melbourne Airport Site is currently underperforming, both financially and operationally, and various changes have been identified in order to increase its productivity and efficiency. One of these involves the management of absenteeism during peak processing times, and Toll believes this can be assisted by altering the current roster structure.

[7] The published RDO roster has typically had 12 days marked out in each year. None of the different work groups at the Site were allocated an RDO on these days. The roster also operates on a rolling basis. This ensures that the allocation of RDOs falls on different days of the week in each month, meaning that each workgroup does not always have its RDO fall on the same day in each month. However, this arrangement also means that some work groups are allocated 11 RDOs in a calendar year, whereas others receive 12.

[8] However, Mr Rolfe states that these roster arrangements are not structured around the requirements of the business including, in particular, the increased customer demand experienced at peak processing times. This means that at those times there are approximately 15-20 employees absent on RDOs in addition to the normal absences, as a consequence of employees taking personal or annual leave. The business is accordingly required to cover peak processing requirements at these times by engaging contract drivers, which means it incurs additional costs. In addition, the contract drivers are generally not as efficient and productive as Toll’s regular full-time employees.

[9] It was therefore decided to make some changes to the roster published in December last year in regard to the next 12 months. These involved, in particular, incorporating additional black out days immediately prior to and following various public holidays in Victoria. These concerned the weeks immediately prior to and following Easter, and the two working weeks leading up to Christmas Day. The other arrangements and practices around the rostering of RDOs otherwise remained the same.

[10] Mr Rolfe also referred to the process of consultation that took place about these changes. Six meetings were held between May 2018 and January 2019 with officials of the TWU and members of the Site Delegates Committee, and provided details about the changes during the course of these discussions. He also was involved in a number of other formal and informal discussions about the changes. The Site Delegates Committee was also permitted to hold meetings with the broader workforce to discuss the changes, and to provide feedback.

[11] Mr Rolfe confirmed in response to a question from the Commission that the proposed changes to the 2019 roster had two principal objectives. It was intended, firstly, that the roster would continue to operate on a rolling basis so that individual workgroups did not receive their RDO on the same day each month. However, the additional marked days would also enable the productivity and cost saving initiatives that had been identified to be achieved.

Toll’s Submissions

[12] The employees at the Melbourne Airport Site are covered by the following industrial instruments:

•  Toll – TWU Enterprise Agreement 2017-2020 (otherwise known as the “Heads of Agreement.”);

•  Toll IPEC (Victorian Metro) Local Agreement, as incorporated by the Heads of Agreement (“the Local Agreement”); and

•  the Road Transport and Distribution Award 2010 (“the Award”).

[13] Clause 14 of the Local Agreement requires the RDO roster for the forthcoming year to be posted on the notice board, and this was done on 31 December 2018.

[14] The additional black out days were included in the proposed 2019 roster to:

•  improve the operational productivity and efficiency of the business by more closely matching its workforce availability to industry peaks and work flows;

•  improve the ability to plan ahead for workload peaks, and to decrease the uncertainty around peak times; and

•  reduce costs in circumstances where the Site is currently running at a significant loss.

[15] However, Toll believes the changes are opposed by some employees because a small number, who would otherwise be able to take a block of four or five days leave in conjunction with a public holiday, might not be able to continue to do this. It submits in response that the new roster is actually fairer for all employees, and means they each receive the same number of RDOs in each calendar year, whereas this is not the case at present. In addition, none of the industrial instruments that apply to the workplace contain specific provisions that restrict its ability in relation to the rostering of RDOs.

[16] It highlights the following provisions in this context. Firstly, the Award makes specific reference to the rostering of RDOs being changed by agreement, or otherwise at the discretion of the employer, subject to appropriate notice being provided to the employees. The Heads of Agreement and the Local Agreement also contain objectives that refer to promoting productivity and business efficiency. For example, the Heads of Agreement at clause 2(d) refers to “enhancing the productivity, efficiency, profitability, viability and sustainability of Toll’s operations.” Clause 3(a) and (b) of the Local Agreement also make reference to facilitating new initiatives and the implementation of measures to approve productivity and efficiency. It submits, in response, that the introduction of the additional marked out days in the proposed 2019 roster is consistent with these objectives.

[17] It also relies on what it describes as the well-established principle concerning management prerogative, and the right of an employer to make decisions about how to manage its business. It relies on the decision in Australian Federated Union of Locomotive Enginemen v State Rail Authority (NSW) 1 in support of this submission.

[18] Toll continues to submit that the TWU’s reliance on custom and practice in opposition to the changes is unreasonable. It notes, firstly, that the roster already incorporates the concept of black out days, and it is only proposing to extend the number of those days in the roster. Secondly, any suggestion that it is prevented from changing the way in which the business operates is commercially unsound and unreasonably restricts its ability to make appropriate operational changes. It also relies on the decision in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Siemens Ltd 2 in support of the submission that the existence of a custom and practice does not make the status quo enforceable forever.

[19] It also submits that TWU’s attempt to place reliance on custom and practice is at odds with clause 2(d) of the Local Agreement, which provides that:

“The parties intend this Local Agreement to capture any unwritten “custom and practice” applying to the Employees. After the commencement of this Local Agreement no unwritten custom and practice will be regarded as applying to the Employees.”

[20] It continues to submit that none of the relevant industrial instruments contain a prohibition on changing RDO rosters, or altering the number of black out days, and custom and practice cannot be relied upon to override its ability to make these operational changes in appropriate circumstances.

[21] It also relies on the decision in BP Refinery (Westernport) Pty Ltd v Shire of Hastings 3 in opposing the submission that the existing arrangements around the RDO roster, and the number of black out days, are an implied term of the employees’ employment contracts as a consequence of the prevailing custom and practice at the Site. In its submission any suggestion of an implied term in the employees’ contracts is unreasonable and inconsistent with its obligations as an employer. It continues to submit:

“The implied term must be reasonable and equitable. It must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it, and it's so obvious that it goes without saying.” 4

[22] It also submits, in conclusion, that the propositions established by the decision of the High Court in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (“Con-Stan”) 5cannot be relied upon to support the TWU’s reliance on custom and practice. Firstly, the arrangements regarding black out days on the roster are not a custom and practice that can be said to be so well known and understood that they are acquiesced to and agreed upon by all parties. Secondly, they are not a custom and practice that is so notorious that everyone enters into their contracts of employment at the Site with this as an implied term. For example, it is not a common practice across Toll’s business operations generally, and it is not a practice that applies at any of its other sites.

The Respondent’s Evidence and Submissions

Mr John Rowe

[23] Mr Rowe has been employed by Toll and its predecessor entities for approximately 30 years. He has also been a TWU delegate at the Melbourne Airport Site for the past 15 years and has served on the Branch Committee of Management of the Union since 2004. He has also been involved in the enterprise bargaining negotiations that have taken place at the Site in the time that he has been employed.

[24] Mr Rowe takes issue with some of the evidence of Mr Rolfe. He said the Melbourne Airport Site is open on public holidays and runs at around 50% capacity at these times. However, he also acknowledged in cross-examination that the Site generally only operates on Victorian public holidays when there are non-aligned public holidays in New South Wales. He was also not aware that Toll has provided employees with data in the past that indicates that increases in freight volumes, service level requirements, and customer demand occurs in what Toll describes as its peak processing times. He indicated instead that in his experience there was no noticeable difference in the volume of work performed at these times and on some occasions, such as Christmas Eve, the work volumes are actually less than normal.

[25] Mr Rowe acknowledged that the RDO system was changed around 18 years ago because it was not operating effectively and needed to be improved. He was a Union delegate at the time and worked with management to devise and implement the system now in place. He disagreed with the description of the relevant days as “black out days” and said they were more commonly described by the employees as “step days” as they were designed to ensure the allocation of RDOs occurs on different days of the week in each month so that each work group did not have an RDO falling on the same day in each week.

[26] He continued to state, “They are not black out days due to purported resourcing issues, but step days to allow consistency and continuity in the allocation of RDO’s.” 6 He also disagreed with the suggestion that the current arrangements mean the most efficient and most productive employees were often absent at peak volume times. In his experience the current RDO system operates instead in an arbitrary selection manner, with the effect that the employees absent on any given day are selected randomly.

[27] He also acknowledged in cross-examination that he was not aware of anything contained in any Agreement that has application at the Site that restricts the rostering of RDOs, or otherwise regulated the rostering of RDOs.

Mr Brett Packer

[28] Mr Packer is employed at the Melbourne Airport Site and is also a TWU Site delegate. He also considered that the so-called black out days are more appropriately referred to as step days, and were included in the roster to ensure the allocation of RDOs fell on different days of the week in each month for the different work groups at the Site. He indicated that there are a number of anomalies in the RDO roster now proposed by Toll and it appeared, for example, that on some occasions more than one work group would have an RDO on the same day.

Mr Mouhammed Joud

[29] Mr Joud has worked at the Melbourne Airport Site since 2000 and is now a Leading Hand. He has also been a Union delegate at the Site for the last 13 years and has been involved in the negotiation of the Agreements that apply at the Site during that time.

[30] Mr Joud made reference to the evidence in Mr Rolfe’s witness statement about “delivery in full and on time” or “DIFOT”. He said that when the business transitioned to the Melbourne Airport Site in November 2015 the employees were regularly informed by their Supervisor about the DIFOT figures for the previous day. However, they had not been referred to in toolbox meetings during the past 20 months, and the employees believed they were no longer of concern to the business. He also understood that the DIFOT figures were affected by many variables, such as truck breakdowns, sorting system malfunctions, and the nature of the customer, including whether it was an industrial, retail or consumer customer. However, he also indicated in cross-examination that while he was not aware of the current DIFOT figures this did not necessarily mean they were not being utilised by the business.

The TWU’s Submissions

[31] The TWU submits that the rosters at the Melbourne Airport Site, and at previous locations, have for a number of years made provision for step days. However, the RDO roster proposed for 2019, and the proposed introduction of additional black out days, was a very different concept to making provision for step days. It also takes issue with the submission that the additional days proposed to be “blacked out” are intended to accommodate peak processing times, and that the core workforce was required at these times. The TWU also takes issue with the number of employees who are claimed to be typically absent from work at these peak times due to annual and personal leave. As a consequence the introduction of the additional black out days will not lead to the operational outcomes that Toll claims.

[32] The TWU does acknowledge in its submissions that the RDO arrangements can be changed, but it maintains that this should not occur unilaterally. It refers to sub clause 22.5 of the Road Transport and Distribution Award 2010 in this context, and sub clause 22.5(a)(ii), in particular, which states:

“an employee’s normal rostered day off may be changed by agreement between the employer and employee. In the absence of agreement, 48 hours’ notice of such alteration must be given to the employee.”

[33] In its submission this clause has application when a rostered day off has already been scheduled, and allows for change to those arrangements when some unforeseen circumstance arises, either by agreement or in the absence of agreement by 48 hours’ notice being provided. However, this clause is not intended to enable wholesale changes to the scheduling of RDOs over a 12 month period in the manner now proposed by Toll.

[34] It also acknowledges the objectives in the Agreements that make reference to the development and implementation of reasonable productivity and efficiency measures. However, it also refers to those objectives which refer to maintaining and enhancing fair working conditions, and submits these must also be considered on a complementary basis.

[35] It also submits that the current rostering practices at the Site have become “a usage… and thus managerial prerogative is mitigated so that there is not a unilateral management right to implement a new RDO system.” 7 It refers to the decision in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd8 at 236-237 in support of this submission. The RDO calendar posted at the beginning of each year has accordingly become a custom and practice and, as a consequence, an implied term of the employees’ contracts of employment.

[36] It continues to submit that the current practices in regard to RDO rostering have been in place for around 18 years under a series of different Agreements. The current RDO roster is accordingly an implied term of the employees’ contract of employment and therefore cannot be changed unilaterally. In its submission the exercise of managerial prerogative has limits, and the Commission should not remove an entitlement that has attained status as a “usage.”

[37] It continues to submit that the reliance on custom and practice does not mean that change can never be implemented. There are instead various ways in which change can occur, including through the renegotiation of the existing Agreements. It also rejects the submission that clause 2(d) of the Local Agreement prevents the recognition of custom and practice because the relevant custom and practice it seeks to rely on in this case has not been set out in writing. In its submission the posting of the foreshadowed RDO roster each year is in written form and this requirement in the Local Agreement has accordingly been satisfied. It also makes reference to clause 85 of the Heads of Agreement, and the reference at paragraph (c) to custom and practice in circumstances where the parties have unintentionally failed to reflect that custom and practice in the Local Agreement. In its submission this confirms that where a custom and practice exists that has not been captured by the Local Agreement, then it is intended that it continue to have application.

Consideration

[38] In dealing with the present application it is appropriate at the outset to set out the relevant provisions in the various industrial instruments that have application to the employees at Toll’s Melbourne Airport Site. Those instruments are:

•  the Toll – TWU Enterprise Agreement 2017-2020 (otherwise known as “the Heads of Agreement.”);

•  the Toll IPEC (Victorian Metro) Local Agreement (“the Local Agreement.”); and

•  the Road Transport and Distribution Award 2010 (“the Award”).

The Toll – TWU Enterprise Agreement 2017-2020

[39] The Toll – TWU Enterprise Agreement 2017-2020 came into force on 15 December 2017 and its nominal expiry date is 30 June 2020. The following provisions appear to be of relevance in the context of the present dispute.

[40] The Objects are set out in clause 2 and include the following:

“(a) enhancing the safety and fairness of Toll’s operations;

……

(c) maintaining the safety net and enhancing fair working conditions for Transport Workers;

(d) enhancing the productivity, efficiency, profitability, viability and sustainability of Toll’s operations;”

[41] Clause 3 “Definitions” includes the following definitions:

“Award means:

(a) the Road Transport and Distribution Award 2010; and

(b) the Road Transport (Long Distance Operations) Award 2010.”

……

Local Agreements means the enterprise agreements, workplace agreements, certified agreements and other arrangements listed in Part B, together with any agreement made pursuant to clause 8.3.

……

Unexpired Local Agreement means a Local Agreement that has been approved, registered, certified or otherwise formalised under industrial legislation and which has not, as at the Operative Date, passed its nominal expiry date.”

[42] Clause 6 “Relationship to the Award and the NES” relevantly states:

“(a) This Agreement incorporates the Award, provided that Part A of this Agreement and the Local Agreements will prevail over the Award to the extent of any inconsistency. An inconsistency will not arise simply because the Award provides a more beneficial entitlement to a Transport Worker than that contained in Part A of this Agreement.”

……

(c) For the avoidance of doubt Toll will ensure that no Transport Worker will lose any entitlements that they may currently have arising out of any Instrument.”

[43] Clause 8, “Local Agreements” relevantly states:

“8.1 Continued effect and enforcement of Local Agreements

(a) The Local Agreements are incorporated into this Agreement and have effect subject to this clause 8.

(b) Part A of this Agreement prevails over the Local Agreements to the extent of any inconsistency. An inconsistency will not arise simply because a Local Agreement provides a more beneficial entitlement to a Transport Worker than that contained in Part A of this Agreement.

(c) Clauses 8.1 (a) and (b) apply to any Unexpired Local Agreement from the day that

agreement passes its nominal expiry date.

……

8.5 Customs and Practices absorbed

(a) This Agreement is not intended to alter a custom and practice applicable to Toll and Transport Workers.

(b) As part of the review or creation of a Local Agreement under clauses 8.2 or 8.3, the Parties will include any custom and practice that is agreed to apply to Toll and the Transport Workers at the site or business.

(c) Once a Local Agreement has been reviewed or made under clauses 8.2 or 8.3, and subject to clause 8.5(d), no unwritten custom and practice will be regarded as existing in respect of the site or business covered by the Local Agreement.

(d) Clause 8.5(c) will not preclude the continuing application of a custom and practice where the Parties have unintentionally failed to reflect the custom and practice in a Local Agreement.”

[44] Clause 14 “Consultation on workplace change” also relevantly provides:

“(c) In addition to the above, where there is a proposed change to Transport Workers’ regular rosters or ordinary hours of work Toll must provide information to the Transport Workers about the change and invite the affected Transport Workers to give their views about the impact of the change, including any impact in relation to their family or caring responsibilities.

(d) Toll will give prompt and genuine consideration to matters raised by the affected Transport Workers and the Union about the changes referred to in clauses 14(a), (b) and (c).

(e) As soon as a final decision has been made, Toll must notify the Union and the Transport Workers affected, in writing, and explain the effects of the decision.

(f) In the event that a Dispute arises in respect to any decision, proposal or consideration to effect any change, the parties agree to follow the disputes procedure in clause 15, and until the Dispute is resolved in accordance with that procedure the status quo before the Dispute arose will be maintained and work will continue without disruption.”

[45] “PART B – LOCAL AGREEMENTS” then continues to list a series of relevant local agreements, which include the “Toll IPEC (Victorian Metro) Local Agreement.”

The Toll IPEC (Victorian Metro) Local Agreement

[46] Clause 2(b) of the Toll IPEC (Victorian Metro) Local Agreement indicates that it commenced operation on Monday, 16 November 2015 “…and will continue until it is terminated or replaced in accordance with the National Agreement.”

[47] Clauses 1 and 2 continue to state that the parties to the Agreement are Toll IPEC and those employees of Toll who are employed at the Melbourne Airport. It continues to state at clause 2(d):

“The parties intend this Local Agreement to capture any unwritten “custom and practice” applying to the Employees. After the commencement of this Local Agreement no unwritten custom and practice will be regarded as applying to the Employees.”

[48] It then continues to state under the heading “National Agreement”:

“a) The National Agreement applies to the parties.

b) The parties make this Local Agreement pursuant to clause 8 of the National Agreement and intend it to be incorporated into the National Agreement.

c) This Local Agreement is subject to and must be read in conjunction with the National Agreement.

d) A list of the terms contained in the National Agreement is set out in the attached schedule.”

[49] Clause 3 “Purpose of this Agreement” then states:

“a) Intent

This Local Agreement is intended to allow Toll IPEC and the Employees to achieve a stable and workable employee relations environment in Toll IPEC’s business to provide flexibility, a competitive edge, improved efficiency and quality services. To this end, the parties agree to work together to facilitate:

•  more innovative working arrangements;

•  improve customer service requirements;

•  opportunities for staff to participate in new initiatives;

•  initiatives which improve quality, cost and delivery along with culture and engagement.

Nothing in this Local Agreement is intended to limit or restrict management discretion in running the Toll IPEC business.

b) Continuous Improvement

a) The parties are committed to genuinely identifying and implementing measures to improve productivity and efficiency in Toll IPEC’s business during the life of this agreement.

b) The Employees will participate constructively in developing reasonable productivity and efficiency measures.

c) Specific measures to be considered as part of the broad agenda shall include matters such as:

•  Improved service delivery

•  Flexible work patterns

•  Work roster modelling

•  Work practice reviews

•  Service improvement processes

•  Improving safety performance and minimising workers compensation costs etc

d) The Employees will cooperate in providing Toll IPEC with more flexible arrangements and savings which when implemented will facilitate greater job security and customer service.”

[50] Clause 14 “Rostered Days Off (RDO’s)” also states:

“An RDO roster, for the coming 12 months, will be completed by the Company and displayed on the noticeboard.”

The Road Transport and Distribution Award 2010

[51] Clause 22 of the Road Transport and Distribution Award 2010 “Ordinary hours of work” states at sub clause 22.5:

“Ordinary hours of work may be worked in the following ways:

(a) providing for a rostered day off:

(i) by employees taking a rostered day off in accordance with the roster implementing the work cycle in the depot, yard or garage;

(ii) an employee’s normal rostered day off may be changed by agreement between the employer and employee. In the absence of agreement, 48 hours’ notice of such alteration must be given to the employee; or

(iii) rostered days off may be accumulated to a maximum of 10 days and taken or paid out at the applicable base rate of pay in any combination agreed in writing between the employer and employee;”

[52] The essence of the matters in dispute can be summarised relatively briefly against this detailed review of the relevant provisions in the different industrial instruments. Toll submits, on the one hand, that it has complied with its obligations under those provisions in regard to the RDO arrangements to apply for the next 12 months, and there is nothing that prevents it from doing what it now proposes. However, the TWU submits in response that a custom and practice exists at the Melbourne Airport Site regarding the RDO rosters, and that custom and practice prevents Toll from making changes to those arrangements without the agreement of the employees. I turn now to deal with these competing claims.

[53] Clause 14 of the Enterprise Agreement, or the “Heads of Agreement” as it is known, requires Toll to consult with employees when changes to regular rosters or ordinary hours of work are being proposed. It is not absolutely clear whether this obligation actually extends to encompass changes of the kind now proposed, however, it is not necessary to determine this issue at this point as the evidence of Mr Rolfe, regarding the various consultation meetings that took place between May 2018 and January this year, make clear that this obligation, if it exists, has in any case been satisfied. It is also noted that the TWU did not suggest that appropriate consultation has not occurred.

[54] Clause 14 of the Local Agreement also requires that the RDO roster for the forthcoming 12 months be posted on the noticeboard. The evidence again makes clear that this requirement has been complied with.

[55] The parties then variously rely on the broad objectives set out in the Heads of Agreement and the Local Agreement in support of their respective positions. Toll submits that the reference in the Heads of Agreement to enhancing productivity, efficiency and profitability, together with the range of matters referred to in the Local Agreement at clause 3(a) and (b) under the headings “Intent” and “Continuous Improvement,” provide support for its ability to make the changes it wants to implement in regard to the rostering of RDOs. However, the TWU also highlights those objects in the Heads of Agreement, which make reference to enhancing the safety and fairness of Toll’s operations, and maintaining a safety net of fair working conditions for its employees.

[56] I am satisfied, in response, that these references to the Objects and Purpose clauses in the relevant Agreements do provide broad support for what Toll now proposes and do not, of themselves, prevent it from making these changes. It is noted at the outset that some of the evidence provided on behalf of the TWU suggested that the changes might not actually deliver the productivity gains that Toll claims. However, I simply indicate in response that I am not satisfied that this is necessarily a relevant consideration in the determination of this matter. The Commission is not required to be involved in ‘second-guessing’ management decisions, or making assessments about the merits or otherwise of those decisions, provided they are made in accordance with the prevailing industrial instruments. It is accordingly sufficient to conclude at this point that the references to enhancing productivity and efficiency in the relevant Agreements provide support for the changes that Toll now proposes.

[57] I am also not satisfied that the provisions relied on by the TWU prevent these changes from being implemented. I do not consider that they can be said to represent a significant erosion of existing working conditions to the extent that they can be categorised, for example, as involving a diminution of the safety net of fair working conditions. It is also noted that some of the evidence suggests the existing RDO arrangements only provide a benefit to some employees, and the proposed changes will mean all employees receive the same number of RDOs each year, whereas the existing arrangements mean in any given year some employees have one additional RDO.

[58] The TWU also relies on the provisions in sub clause 22.5(a)(ii) in the Road Transport and Distribution Award 2010 to suggest that the relevant starting point is that changes to RDOs can only be made by agreement between the employer and employee, and the provisions referring to the absence of agreement are only relevant in circumstances where some emergency or short-term expediency arises. Those submissions are acknowledged. However, I am not satisfied that a plain reading of the relevant words supports such a conclusion. Those words appear instead to make clear that normal RDO arrangements can be changed by agreement, but in the absence of agreement can be changed by 48 hours’ notice being provided by the employer to the employee. I am accordingly not satisfied that these provisions provide a bar to what Toll now proposes.

[59] The TWU also relies on what it describes as a custom and practice regarding the RDO arrangements at the Melbourne Airport Site as acting to prevent the changes. The evidence of Mr Rowe makes clear that the existing arrangements have been in place for some time. It suggests they have been in place for the past 18 years, and he was involved in devising the current arrangements when the previous system was found to not be operating effectively. The TWU also submits that the current arrangements have been reduced to writing, given that under clause 14 of the Local Agreement Toll is required to post details, in writing, on the noticeboard of the RDO roster for the forthcoming year. It also submits that the current practices have become a custom and practice, or a “usage,” by virtue of their long-standing nature, and the decision of the High Court in Con-Stan is accordingly relevant in this context.

[60] The Heads of Agreement does deal with custom and practice at sub clause 8.5, although it provides little more than what might be described as ‘a bit each way.’ It indicates on the one hand that the Agreement is not intended to alter a custom and practice that applies, but that the creation of any Local Agreement is to include any custom and practice that is agreed to have application at a particular site. It then states in sub clause 8.5(c) that once a Local Agreement has been made “no unwritten custom and practice will be regarded as existing in respect of the site or business covered by the Local Agreement.” However, it then concludes in sub clause 8.5(d) by stating that despite the above intention the Local Agreement will not act to “preclude the continuing application of a custom and practice where the Parties have unintentionally failed to reflect the custom and practice in a Local Agreement.”

[61] Clause 2(d) of the Local Agreement is clearer in its intent in regard to the ongoing application of any identified custom and practice when it states, “The parties intend this Local Agreement to capture any unwritten “custom and practice” applying to the Employees. After the commencement of this Local Agreement no unwritten custom and practice will be regarded as applying to the Employees.” As indicated, this wording makes clear that no unwritten custom and practice can be claimed to exist after the commencement date of the Local Agreement, being 16 November 2015. However, the TWU submits that this does not prevent the ongoing application of the custom and practice that it claims to exist, because the posting of the RDO roster on the noticeboard each year for the following 12 months is the written expression of that custom and practice.

[62] However, I am not satisfied that this submission can be accepted. It is acknowledged that the RDO roster for the next 12 months is posted on the noticeboard. This occurs as a consequence of the requirement in clause 14 of the Local Agreement. It is also acknowledged that the roster posted in accordance with clause 14 has for a period of several years contained the same number of black out or step days. However, posting of the roster on the noticeboard is simply an expression of the requirement contained in clause 14. There is nothing in that clause or anywhere else that states in writing that the number of black out or step days is to be the same each year, or that they are to fall on the same dates in each year. I am accordingly unable to conclude, based on the available evidence, that a custom and practice exists that has been reduced to writing in regard to the days that are to be black out or step days.

[63] The TWU also submitted that if the Commission is not satisfied that the custom and practice has been expressed in writing, then it should consider whether an unwritten custom and practice exists by reference to the principles established by the decision of the High Court in Con-Stan. While that decision was dealing with circumstances arising from a commercial dispute the Commission has previously concluded that the requirement for establishing the existence of an unwritten custom and practice should be determined in accordance with the propositions identified by the High Court in Con-Stan.

[64] The four propositions identified by the High Court in Con-Stan in establishing whether a trade, custom, or usage exists that may be implied into the terms into a contract 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.” 9

[65] However, I am not satisfied that it is necessary to go to this next step as the relevant provisions make clear that there is no scope for incorporating or including any unwritten custom and practice in the ongoing employment arrangements. The following provisions are relevant in this context:

•  Clause 8.5 of the Heads of Agreement makes clear that once a Local Agreement has been made no written custom and practice will be regarded as existing in respect of the site covered by that Local Agreement, however, this will not preclude the continuing application of a custom and practice where the parties have unintentionally failed to reflect it in the Local Agreement.

•  However, clause 2(d) of the Local Agreement then makes clear that, “After the commencement of this Local Agreement no unwritten custom and practice will be regarded as applying to the Employees.”

[66] I am satisfied that this latter provision in clause 2 of the Local Agreement accordingly ‘closes the door’ on the potential incorporation into any employment arrangements at the Site of any unwritten custom and practice that might be claimed to exist.

[67] However, if I am wrong in this it is noted that the application of the provisions in Con-Stan were 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, 10 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. A number of factors in this case tell against the conclusion that the practice referred to earlier was 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.”

[68] I am satisfied that a similar conclusion can be drawn in all the circumstances of the present matter. While it is acknowledged that the practice in regard to black out or step days appears to have been similar over an extended period of time the evidence also makes clear that those practices have also changed at various times when they were found to not be working effectively. This indicates that while the practice may not have changed on regular occasions, it was able to be changed from time to time, as required. This works against a conclusion that everyone entering into a contract at the Melbourne Airport Site can reasonably be presumed to have imported a term into their contract regarding the practices concerning the rostering of RDOs.

[69] As indicated, I am not satisfied that it is necessary to have regard to the propositions in Con-Stan, given the conclusion that I have come to that the terms of the Local Agreement have already closed off the incorporation of any unwritten custom and practice that might be found to exist. However, for the reasons indicated above I am not satisfied, in any case, that the application of the propositions in Con-Stan help the TWU to establish that an unwritten custom and practice exists in regard to the rostering arrangements concerning RDOs.

Conclusion

[70] I am not satisfied, in conclusion, that a custom and practice exists at the Melbourne Airport Site regarding the number of marked days on the roster, known as black out days or step days, that prevents changes to those roster arrangements other than by agreement with the employees. I am also satisfied, for the reasons indicated above, that there is nothing in the relevant industrial instruments that necessarily prevents the implementation of the changes that Toll now proposes.

COMMISSIONER

Appearances:

L Dobson for the Applicant.

J Cooney for the Respondent.

Hearing details:

2019.

Melbourne:

15 April

Printed by authority of the Commonwealth Government Printer

<PR713607>

 1 (1984) 295 CAR 188.

 2   [2016] FWC 2041.

 3 (1977) 180 CLR 266.

 4   Transcript at PN250.

 5 (1986) 160 CLR 226.

 6 Exhibit TWU1 at [26].

 7 Respondent’s Outline of Submissions, dated 4 April 2019 at [23].

 8 (1986) 160 CLR 226.

 9   Ibid at 236-237.

 10   [2016] FWC 2041.