Transport Workers' Union of Australia v Linfox Australia Pty Ltd

[2022] FWCFB 36

[2022] FWCFB 36

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.604—Appeal of decision

Transport Workers’ Union of Australia
v

Linfox Australia Pty Ltd

(C2021/7273)

Linfox Australia Pty Ltd
v
Transport Workers’ Union

(C2021/7282)

DEPUTY PRESIDENT GOSTENCNIK
DEPUTY PRESIDENT CLANCY
COMMISSIONER O’NEILL MELBOURNE, 26 APRIL 2022

Appeal against decision [2021] FWC 6009 of Commissioner Cambridge at Sydney on 8 October 2021 in matter number C2019/5482.

Introduction

1. On 8 October 2021 Commissioner Cambridge determined by arbitration an application by the Transport Workers’ Union of Australia (TWU) to deal with a dispute under s 739 of the Fair Work Act 2009 (Act). The dispute concerned a claimed ongoing entitlement of certain TWU members employed by Linfox Australia Pty Ltd (Linfox) as linehaul drivers at its intermodal facility in Chullora, New South Wales to be paid 130% of the ordinary time rate while performing various non-driving duties.[1] These duties were particularised in the TWU’s closing submissions before the Commissioner at [29.1].[2] The claimed time (and payment) for the performance of these duties, which we will describe as “the disputed payments”, is also sometimes referred to by the parties as “EBA hours”.[3] The affected linehaul drivers are covered by the Linfox and Transport Workers Union Road Transport and Distribution Centres Agreement 2018 (Agreement).

1. Linfox ceased making the disputed payments on 25 August 2019. The TWU maintains that Linfox was not entitled to do so on several bases. The TWU maintains that the disputed payments constituted a custom and practice, which gave rise to an implied contractual term; or that principles of conventional estoppel prevented Linfox from departing from a common assumption as to the terms of the legal relationship between it and the affected linehaul drivers; or that the disputed payments were an industrial custom and practice for the purposes of clauses 5 and 34 of the Agreement which could not be ceased unilaterally.

1. The Commissioner decided that although the disputed payments were an industrial custom and practice for the purposes of the Agreement, Linfox was permitted to cease payments for most of the non-driving duties, other than for a period during which the status quo provision in clause 33.4 of the Agreement operated.[4] The Commissioner also decided that Linfox was obliged to continue making certain non-driving duties payments pursuant to clause 1.24 of a document known as the ‘NSW Common Law Deed’(Deed) which the Commissioner concluded had been relevantly incorporated into the Agreement.[5]

1. The TWU and Linfox each appeal aspects of the Commissioner’s decision.

Permission to appeal

1. It is uncontroversial and we agree that by reason of clause 33.1(f)(i) of the Agreement, which provides that there “shall be a right of appeal to a Full Bench of the FWC against a decision” made in the exercise of arbitral power conferred on the Commission by clause 33.1(e), permission to appeal is not required in either case.

The decision at first instance

1. The Commissioner sets out the procedural history and background to the dispute at [1]–[21] of the Decision. A summary of the parties’ contentions is found at [22]–[44] of the decision. At [47] the Commissioner distils the various propositions advanced by the parties into the following questions for determination:

1.Was it a custom and practice for the purpose of clauses 5 and 34 of the Linfox and Transport Workers Union Road Transport and Distribution Centres Agreement 2018 (the 2018 EA) as at 25 August 2019, that the Chullora linehaul drivers be paid at a rate of 130% ordinary time rates for one or more of the non-driving duties set out at [29.1] to the applicant’s closing submissions of 26 April 2021?

2.Was Linfox prevented from ceasing payments to Chullora linehaul drivers for the non-driving duties as it did on 25 August 2019, because either;

(a)the payments for non-driving duties represented a contractual custom and practice, or

(b)the payments for non-driving duties represented an industrial custom and practice, or

(c)continuation of the payments for non-driving duties was a legal obligation arising from the application of the principles of conventional estoppel?

3.Is there any ongoing obligation on Linfox to continue the payments for the non-driving duties in view of the correct characterisation established for those payments?

4.Was Linfox prevented from ceasing payments to Chullora linehaul drivers for the non-driving duties as it did on 25 August 2019, by virtue of the operation of the Status Quo provisions of clause 33.4 of the 2018 EA?

1. Next the Commissioner discusses the relevant enterprise agreement construction principles and the distinction between industrial and contractual custom and practice. At [58] of the decision the Commissioner finds that the payments made to the affected linehaul drivers for the non-driving duties was well known and acquiesced in by the drivers and Linfox over a significant period of time and that payment for the non-driving duties was notorious, and available to and paid to all drivers performing the Chullora linehaul trips. The Commissioner also concluded that “claims for payments by individual drivers were not uniform and subject to case by case challenges, but these individual variations were matters of detail and distinct from the general operation of the practice of payment in respect to the non-driving duties”.

1. At [59]–[62] of the decision the Commissioner set out his reasons for rejecting the TWU’s contention that the custom and practice of making the disputed payments was an implied term of each affected linehaul driver’s employment contract as follows:

[59]     Importantly, one significant component of the non-driving duties was contrary to an express term that was incorporated into the 2018 EA. Paragraph 8 of the NSW Local Transport/Linehaul/Sanitarium part of clause 1.24 - Local Matters contained in the NSW Common Law Deed stated that “Drivers will be responsible for the completion of pre trip vehicle checks as per the Linfox Driver Handbook and Linfox policies in force from time to time.” On any reasonable and objective reading of these terms in the context of the surrounding provisions of this part of clause 1.24 - Local Matters contained in the NSW Common Law Deed, it was unambiguously clear that the documented agreement between the Parties established that no payment would be made to drivers in respect to time taken to complete pre trip vehicle checks.

[60]     Despite the unambiguous words of paragraph 8 of the NSW Local Transport/Linehaul/Sanitarium part of clause 1.24 - Local Matters contained in the NSW Common Law Deed which required drivers to complete pre-trip vehicle checks without additional payment, a practice quickly developed which directly contradicted these terms. The evidence demonstrated that the nature and extent of the non-driving duties which were claimed by the drivers and paid by Linfox “grew like topsy” and seemed to arise from a combination of coercive demands from local drivers’ representatives and submissive acquiescence of local managers.

[61]     Importantly, as the non-driving duties expanded beyond the documented provisions of the NSW Local Transport/Linehaul/Sanitarium part of clause 1.24 - Local Matters contained in the NSW Common Law Deed, there was no subsequent documentary embodiment of these practices. There was evidence of a number of attempts to create new local matters agreements that reflected the expanded non-driving duties, but no signed documentary evidence was able to be produced.

[62]     Consequently, in circumstances where one significant aspect of the custom and practice involved the payments for duties contrary to an express term that was incorporated into the 2018 EA, a vital foundational element necessary to satisfy the principles established in the Con-Stan Judgement, was not satisfied. In addition, the absence of any properly executed documentation that reflected agreement in respect of the expanded non-driving duties would, when faced with the entire agreement clause of each of the drivers’ contract of employment documents, similarly operate to establish the absence of one of the vital Con-Stan elements. Although the payments to the Chullora linehaul drivers for the non-driving duties possessed many of the elements upon which to establish it as a contractual custom and practice, it ultimately fell short in at least one vital feature.[6]

1. At [63]–[64] of the decision the Commissioner concludes that while the disputed payments were not implied contractual terms, having regard to the evidence of the long-standing operation of the disputed payments, their notoriety, and their continuation including after various challenges involving Commission proceedings in 2012 and 2015, the practice of claiming and making the disputed payments was an industrial custom and practice. And that it was an industrial custom and practice as contemplated by the phrase “custom and practice” in clause 5 of the Agreement.

1. At [66] of the decision the Commissioner noted, without apparently deciding, that the TWU’s conventional estoppel case raised a jurisdictional issue. The Commissioner concluded in any event, that the evidence of repeated attempts by Linfox to challenge the disputed payments demonstrated that there was no common assumption, an element which is essential to make good a claim based on the principles of conventional estoppel.

1. Next the Commissioner considered whether there could be a unilateral cessation to the industrial custom and practice he earlier found existed. The Commissioner concluded at [75] of the decision that neither of clauses 5 nor 34 of the Agreement prevented the unilateral alteration of a custom and practice in circumstances where the processes envisaged by those provision have not culminated in an agreed position.

1. Finally, the Commissioner considered whether there was any ongoing obligation to make the disputed payments or any of them. At [77]–[79] the Commissioner concluded that Linfox was obliged to continue payments for duties identified in clause 1.24 of the Local Matters contained in the Deed because those terms were incorporated into the Agreement pursuant to clause 88.1(k) thereof. Implicit in this finding is that the relevant terms of the incorporated Deed applied to the affected linehaul drivers.

1. But otherwise, the Commissioner concluded that there was no ongoing obligation, save for the period the status quo provision of the Agreement operated upon the dispute. In this regard the Commissioner said:

[84]     The unambiguous, objective common intention that is provided when the ordinary meaning is given to the words contained in subclauses 33.4 and 9.1 (hh) of the 2018 EA, establishes that Linfox was required to maintain the Status Quo and it was not entitled to cease the payments for the non-driving duties as it did on 25 August 2019. In accordance with the Status Quo provisions of the 2018 EA, Linfox is therefore required to make payments for the non-driving duties from 25 August 2019 up to the date of this Decision. However, there is no ongoing requirement for Linfox to continue payments for the non-driving duties after the date of this Decision other than those non-driving duties for which payment is to be made for waiting time and pick up or drop off which satisfies the requirements of paragraphs 1 and 2 respectively of clause 1.24 of the Local Matters contained in the NSW Common Law Deed.[7]

Grounds of appeal

The TWU appeal

1. The TWU appeal focusses on the part of the Commissioner’s decision in which he concluded that “Linfox was not prevented from ceasing payments to Chullora linehaul drivers for the non-driving duties as it did on 25 August 2019, because the payments for non-driving duties represented an industrial custom and practice, nor was it prevented from ceasing these payments because of any legal obligation arising from the application of the principles of conventional estoppel.”[8]

1. It also takes issue with the Commissioner’s conclusion that the disputed payments was not an implied term of the affected linehaul drivers’ employment contracts on the basis of custom and practice.[9]

1. By its notice of appeal, the TWU sets out 8 appeal grounds. These may be conveniently grouped as follows.

1. By grounds 1 through 3 the TWU contends the Commissioner erred in his construction of clause 5 of the Agreement in concluding that the custom and practice at issue could be unilaterally altered. The TWU contends that on a proper construction of clause 5, having regard to clauses 33–34, it preserved extant industrial customs and practices which could not unilaterally be altered.

1. Ground 4 takes issue with the Commissioner’s ‘findings’ at [60] of the decision that “the nature and extent of the non-driving duties which were claimed by the drivers and paid by Linfox ‘grew like topsy’” and that they seemed to arise from “a combination of coercive demands from local drivers’ representatives and submissive acquiescence of local managers” to meet such demands. The TWU contends that:

·  The subject matter to which the first conclusion relates is unclear;

·  The second conclusion is made in an evidentiary vacuum and the decision does not disclose when the coercive demands were made and when the managers acceded or acquiesced to them; and

·  The ‘findings’ were not open because they had no evidentiary foundation.

1. Grounds 5, 7 and 8 relate to the Commissioner’s analysis and conclusions concerning the TWU’s contention that the proper application of the principles of conventional estoppel prevented Linfox from departing from a common assumption as to the terms of the legal relationship between Linfox and each affected linehaul driver. In this regard the TWU contends:

·  The Commissioner’s view that there was no foundation pursuant to the power of private arbitration accorded by clause 33.1(e) of the Agreement to determine whether a conventional estoppel precluded Linfox from departing from the contended for common assumption was erroneous;

·  The Commissioner failed to properly engage or otherwise consider the TWU’s case on conventional estoppel;

·  The Commissioner’s sole reason for rejecting the existence of a conventional estoppel at [66] to the decision was that Linfox had repeatedly challenged payments for the non-driving duties. This conclusion was erroneous because:

oThe evidence only established that on only two occasions had Linfox challenged its obligation to make payments (in 2012 and 2015) and these were confined to its obligation to pay the loaded hourly rate for pre and post-trip inspections. Thus, the challenges pertained only to 2 of the 10 non-driving duties for which disputed payments were made; and

oThough Linfox had raised issues about payments for pre and post-trip inspections in 2012 and 2015, it ultimately acquiesced and continued making such payments. This conduct was entirely consistent with an assumption that payments were required to be made.

1. Ground 6 concerns the Commissioner’s conclusion that the disputed payments was not an implied term of the employment contract of each affected linehaul driver. The Commissioner concluded that the presence of paragraph 8 in clause 1.24 of the Deed and the entire agreement clause in the affected linehaul drivers’ contracts of employment told against the implication of the term for which the TWU contended. Three issues are raised.

1. First, the TWU contends that it was denied procedural fairness because Linfox did not rely on paragraph 8 of clause 1.24 of the Deed before the Commissioner. The TWU contends that the Commissioner should have but failed to give notice to the TWU that he intended to rely on paragraph 8 of clause 1.24 of the Deed as precluding the implication of the term for which the TWU contended.

1. Second, the TWU contends that the Commissioner’s reliance on paragraph 8 of clause 1.24 of the Deed was misguided. This is because:

·  There is nothing inconsistent with paragraph 8 of clause 1.24 of the Deed and the asserted custom and practice as the paragraph says nothing about affected linehaul drivers being required to perform pre-trip vehicle checks without being paid additional remuneration;

·  There was no evidence that ‘pre-trip vehicle checks’ were the same as the pre-trip inspections, payment for which was contended by the TWU to be the subject of the custom and practice found to have existed by the Commissioner;

·  There was no contention that paragraph 8 of clause 1.24 of the Deed formed part of the affected linehaul drivers’ contracts of employment and so could not have been an express contractual term which was inconsistent with the asserted custom and practice;

·  Paragraph 8 of clause 1.24 of the Deed dealt only with pre-trip inspections. It did not deal with any other of the non-driving duties and could not have been an express term which was inconsistent with the implied term requiring Linfox to pay the loaded hourly rate for other non-driving duties for which the TWU contend.

1. Third, the Commissioner’s reliance on the entire agreement clause was also misplaced. The TWU contends that as there are no terms of the affected linehaul drivers’ employment contracts dealing with the subject matter of payment for non-driving duties, no terms are inconsistent with the asserted implied term.

The Linfox appeal

1. The Linfox appeal focusses on two aspects of the Commissioner’s decision. The first concerns the Commissioner’s conclusion that Linfox’s payments for the non-driving duties particularised at [29.1] of the TWU’s closing submissions[10] were made pursuant to an industrial custom and practice for the purposes of clauses 5 and 34 of the Agreement.[11] The second concerns the Commissioner’s conclusion that Linfox had an ongoing obligation to pay the affected linehaul drivers for certain non-driving duties under the Deed as incorporated into the Agreement.[12]

1. By ground 1 of its notice of appeal, Linfox contends that the Commissioner erred in determining that the disputed payments (including the character of the payments) made to some or all affected linehaul drivers at different periods of time for the non-driving duties as particularised at [29.1] to the TWU’s closing submissions of 26 April 2021, amounted to an industrial custom and practice in accordance with clauses 5 and 34 of the Agreement. Linfox contends that although it made the disputed payments to affected linehaul drivers for varying periods of time, it does not follow that the payments constituted a custom or practice of an absolute and obligatory type within the meaning of clause 5 of the Agreement.

1. Linfox contends that various factual findings made by the Commissioner[13] were inconsistent with his finding that making the disputed payments constituted an obligatory or mandatory ‘custom and practice’ for the purposes of clause 5 of the Agreement. It says that the disputed payments it made to the affected linehaul drivers should properly have been characterised as discretionary. Consequently, it contends the Commissioner erred by failing to address the character of the custom and construing clause 5 as accommodating a ‘custom and practice’ that was merely discretionary, and by failing to properly consider the discretionary quality of the disputed payments in determining whether they constituted a ‘custom and practice’ for the purposes of clause 5.

1. Ground 2 contends error in the Commissioner’s conclusion that by reason of clause 1.24 of the Deed as incorporated into the Agreement, Linfox had an ongoing obligation to continue payments in respect to the non-driving duties described therein.

1. Linfox advances two bases for the contended error. The first is a denial of procedural fairness contention by which Linfox says that in none of the TWU’s written or oral opening submissions, nor in its written closing submissions did the TWU contend that clause 1.24 of the Deed applied to the affected linehaul drivers. Linfox also points out that in its closing submissions it had twice submitted that the TWU did not contend that the affected linehaul drivers’ entitlements to the disputed payments arose under or by virtue of the Deed and the TWU did not contest this in reply nor was the issue raised in oral closing submissions.[14] Linfox says it could not have reasonably anticipated that the issue would be the subject of an adverse finding and the Commissioner was required to give Linfox a fair opportunity to be heard on the matter before making the finding, which he did not do.

1. The second basis attacks the correctness of the finding. Linfox says that clause 1.24 of the Deed was not incorporated in relation to the Chullora site. Clause 88.2(k) of the Agreement sets out the extent to which the incorporation of the Deed is binding on employees covered by the Agreement and is limited to employees at identified sites. Linfox’s intermodal facility in Chullora is not one of the sites identified. Therefore, because the Commissioner did not find that clause 1.24 of the Deed was binding on Linfox in relation to the affected linehaul drivers on any basis other than his view that it was incorporated into the Agreement, his conclusion that there was an ongoing obligation to make payments in respect of the non-driving duties in clause 1.24 of the Deed was wrong.

Consideration

Procedural fairness grounds (ground 6 of the TWU appeal and ground 2 of the Linfox appeal)

1. It is convenient to deal first with ground 2 of the Linfox appeal in conjunction with that part of ground 6 of the TWU appeal which contends the Commissioner denied it procedural fairness in relation to his finding that the presence, inter alia, of paragraph 8 in clause 1.24 of the Deed told against the implication of the term into the affected linehaul drivers’ employment contracts for which the TWU contended.

1. It is common ground that the question whether the provisions of clause 1.24 of the Deed were incorporated into the Agreement and whether those terms had application to the affected linehaul drivers was not raised before the Commissioner. Moreover, the TWU said that disputed payments claimed were not conditioned on the operation of the incorporated Deed and that its operation was not a matter the subject of the dispute the Commissioner was asked to resolve. During the hearing the following exchange, as recorded in the transcript, occurred:

PN520 MR SHARIFF: Commissioner, I need to be heard on all this.

PN521 MR BONCARDO: And the common law - and so, (k) deals with the employees covered by the common law deed, which we say these employees are and it's clearly picked up by 88.2(k).

PN522 MR SHARIFF: Commissioner, if my friend is finished, can I take you, Commissioner, to the applicant's submissions dated 9 April 2020. Let's have a look at the arguments I've come to meet and upon which we filed evidence. You'll search in vain to find this argument now being put. So, we go to page - ultimately, we go to page 5 of the submissions commencing at paragraph 19. The first contention is that payment of non-driving duties was a term of the contract of the employment of linehaul drivers, alternatively conventional estoppel. Second, a matter of industrial custom and practice.
PN523 We then turn to the contractual arguments. No mention of clause 88, how this argument that my friend has constructed is being put now. It wasn't even put here and as I say, you can look at it for yourself; no argument about that. When you get to industrial custom and practice, no argument about that. Then we get the status quo provision. You then go to the applicant's reply submissions dated 29 May 2020, and you will again search in vain for the argument that my learned friend has now put. My friend now says, mid-stream, even re-examination, after opening submissions written and oral. In a re-examination of his first witness - no, no, that is our case. What? News to me; news to us.

PN524 One also searches in vain in the application constituting the originating process for this dispute, this argument being put. Just not available. If my friend wants to put this argument, he should discontinue this application, bring it properly within the dispute resolution procedure. But I'm not dealing with this argument, and I'm making that clear. I'm not going to deal with it, because it's not been put and I'm prejudiced. I'm not going to deal with it. I've put on the evidence I have; I've now cross-examined the first witness on a very particular forensic basis.

PN525 MR BONCARDO: I was responding to a question that you asked me Commissioner, and that is, my client's position in terms of incorporation. But this dispute, does not relate to the matters that we say are already incorporated into the agreement under the common law deed. It deals with matters - - -

PN526 MR SHARIFF: Why are we dealing with custom and practice, then, if your argument is about incorporation?

PN527 THE COMMISSIONER: I didn't understand that was the case, that's why I thought the reliance upon the custom and practice and the concepts of contract were all necessary because - - -

PN528 MR BONCARDO: We may have been side-tracked here because the issues as to employees being paid loading and unloading, are not the subject of this dispute. The issue is about employees being paid the matters related to drop-offs at customer sites, dealt with in clause 1, under the specific linehaul matters, are not the subject of this dispute. They're already captured by the common law deed.

PN529 So, I think, with respect, we've side-tracked somewhat, from what the precise nature of what this dispute is about. The matters that are dealt with in - or what the respondent calls the above agreement allowances, such as waiting time, truck wash, pre and post-trip inspections, weighing trailers, deviation et cetera, are we say, matters that arose by way of a custom and practice. They're not matters dealt with by the common law deed.

PN530 THE COMMISSIONER: So, there's two categories of matters that are the subject of the payment.

PN531 MR BONCARDO: Yes.

PN532 THE COMMISSIONER: You say some are captured by the common law deed and the common law deed is applicable to this site. Well, that's a position that I didn't understand was being run.

PN533 MR BONCARDO: In respect to - if you could bear with me, Commissioner.

PN534 MR SHARIFF: That's my understanding, Commissioner; I'm completely lost. Just completely lost. I don't think the applicant knows its case.

PN535 THE COMMISSIONER: Sorry, but I remember reading this the first time round, whenever this was last year and being surprised because this is based obviously, I suppose, identified at page 68 of the agreement, where transport Intermodal Sanitarium is not Intermodal Chullora.

PN536 MR SHARIFF: Correct; exactly.

PN537 THE COMMISSIONER: And that's the position as I understood it.

PN538 MR SHARIFF: Exactly. That's now been put differently. I'm completely at a loss and I keep repeating, I am more than significantly prejudiced, including because I have cross-examined the witness based on the case that I was here to meet and locked him into various positions about the extent of what the alleged agreement was that formed the basis of the custom and practice, and I'm not going to redo it. My friend should continue with the case that he articulated in his written submissions, or do something else like discontinue this application and bring the one he now wants to bring.

PN539 THE COMMISSIONER: Am I going to be required to make a determination of this point?

PN540 MR BONCARDO: No, is the short answer. My friend has asked whether our position is that the common law deed is incorporated - - -

PN541 MR SHARIFF: I didn't ask that.

PN542 MR BONCARDO: Our position is - well, that is, as I understand - I'll withdraw that. As I understood your question, Commissioner, you asked whether the common law deed was incorporated. Our answer to that is, yes it is, but it is not relevant for the purposes of this dispute, because the matters, the subject of the custom and practice are additional to the matters set out in the common law deed.

PN543 The question for you, Commissioner, is whether or not, there is a custom and practice for the purposes of clause 5 of the agreement, in respect to the above agreement allowance payments. We are not contending the above agreement allowance payments are the subject of, or dealt with, in the common law deed.

PN544 THE COMMISSIONER: So, the assertion that the common law deed does not apply to Linehaul Chullora, doesn't trouble you?

PN545 MR BONCARDO: That does trouble us and we reject that, but we say that the matters, the subject of this dispute are not captured by the relevant provisions dealing with loading and unloading under the common law deed. This is a dispute, Commissioner, about matters that are extraneous to the common law deed. I apologise if I haven't made that clear.

PN546 THE COMMISSIONER: And it's not necessary for the Commission to make a determination about whether the common law deed had any application to these workers at Intermodal Chullora?

PN547 MR BONCARDO: That's correct. That is so, the parties have different positions, as I apprehended on that.

PN548 THE COMMISSIONER: All right, perhaps we'll just skirt around the issue like that, I suppose.[15] [Our underlining]

1. It seems tolerably clear that although the question of whether the relevant parts of the Deed as incorporated into the Agreement applied to the affected linehaul drivers was in issue as between the parties, in as much as they disagreed about its application to the affected linehaul drivers, the disputed payments claimed were not founded on any purported obligation or entitlement arising under the incorporated Deed. The dispute which was the subject of the arbitration was not concerned with provisions dealing with payments for particular duties under the “Specific Linehaul matters” under the Deed.[16] Rather the dispute was about the ongoing entitlement to the disputed payments which was said to arise from matters and circumstances that were extraneous to the Deed. The duties to which the disputed payments relate are those particularised at [29.1] of the TWU’s closing submissions of 26 April 2022,^[17] and the entitlement of the affected linehaul drivers to be paid the disputed payments in connection with the performance of those duties did not, on the TWU’s case, depend upon the Deed.

1. The question whether the incorporated Deed applied to the affected linehaul drivers and determined any entitlement to the payments under the Deed was not a matter in issue in the dispute the subject of the arbitration. Consequently, neither party made submissions addressing the question and the Commissioner made clear in the exchange extract above that the question would not be the subject of any determination. Before us, the TWU accepted that Linfox had been denied procedural fairness in relation to the Commissioner’s decision at [90 3.].[18] It follows that the procedural fairness aspect of ground 2 of the Linfox appeal has been made out and must be upheld.

1. For the foregoing reasons we propose to quash [79] and [90 3.] of the Commissioner’s decision. Other findings made by the Commissioner which rely on the Deed also cannot be sustained. For example, at [14], [59], [60], [61], [62] to the extent that underpinning these findings or observations is a conclusion that the incorporated Deed applies to the affected linehaul drivers.

1. However, we do not think that it is appropriate on appeal to express a conclusion on whether clause 1.24 of the incorporated Deed applies to the affected linehaul drivers as Linfox urges. This is because, as is evident from the exchange extracted earlier, the Commissioner was not asked to make a determination about the issue, and he was expressly told that there was no need to do so. The issue was plainly not the subject of any dispute between the parties that required the Commissioner’s determination.

1. We also consider that the TWU’s denial of procedural fairness aspect of ground 6 of its appeal is made out. It seems to us that by taking into account the import of paragraph 8 in clause 1.24 of the Deed, the Commissioner concluded, contrary to the indication given during the hearing, that the relevant provisions have operative effect on the affected linehaul drivers. Moreover, Linfox did not contend that the incorporated Deed applied to these drivers, much less that it had the effect the Commissioner found the provision to have on the TWU’s contractual incorporation point. Given the way in which the parties conducted their cases during the arbitration, we agree with the TWU that it was incumbent on the Commissioner to give notice to the parties that he was contemplating relying on paragraph 8 in clause 1.24 of the Deed as precluding the implication of the term into the relevant employment contracts as contended by the TWU. In proceeding to determine the TWU’s contractual incorporation case in the way he did, without alerting the parties to that possibility, the Commissioner denied the TWU procedural fairness.

1. However, the denial of procedural fairness that we have identified is of no moment unless the Commissioner’s conclusion that the entire agreement clause in each of the affected linehaul drivers’ employment contracts “similarly operate to establish the absence of one of the vital Con-Stan elements” was also erroneous. As is clear from the words “similarly operated” in [62], the two matters identified by the Commissioner operated independently to defeat the TWU’s implication by custom and practice contractual claim. If correct, this was enough to sustain the Commissioner’s ultimate conclusion and the denial of procedural fairness is of no moment. We deal with this question later in this decision and turn next to consider the appeal grounds related to the construction of clause 5 of the Agreement.

Proper construction of clause 5 of the Agreement (ground 1-3 of the TWU appeal) and whether the disputed payments were made pursuant to an “industrial custom and practice” (ground 1 of the Linfox appeal)

1. As we have earlier noted the TWU contends that the effect of clause 5 of the Agreement, construed contextually and in light of clauses 33–34, is to preserve extant industrial customs and practices which could not unilaterally be altered. The Commissioner’s construction that clause 5 did not have this effect was, according to the TWU, erroneous. Linfox contends that the TWU’s proposition that the intent and effect of clause 5 is to preserve extant industrial customs and practices is contrary to the plain text of the provision. It contends that clause 5.1 goes no further than saying that the Agreement should not be construed and does not apply in a manner that alters an existing custom and practice, but it says nothing about whether a custom and practice may be altered in another way, including by the unilateral action of one party. We agree with Linfox’s contention.

1. The construction of provisions of an enterprise agreement begins with a consideration of the ordinary meaning of the words, read in context, taking account of the evident purpose of the provisions or expressions being construed. Context may be found in the provisions of the agreement taken as a whole, or in their arrangement and place in the agreement. The statutory framework under which the agreement is made or in which it operates may also provide context, as might an antecedent instrument or instruments from which a particular provision or provisions might have been derived. The industrial context in which an agreement is made and operates is also relevant. Thus, the language of an agreement is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. But context is not itself an end and a consideration of the language contained in the text of the agreement being considered remains the starting point and the end point to the task of construction. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach.[19]

1. Clause 5 of the Agreement is as follows:

5.        CUSTOM AND PRACTICE

5.1      This Agreement is not intended to, nor shall it, alter a custom and practice applicable to the parties.

5.2      It is the intention of the parties to this Agreement to, during the Term, attempt to reduce to writing any custom and practice applicable to Linfox and the Employees.

5.3      The parties will review and where agreed create a local agreement arising from the custom and practice in accordance with Clause 34.

5.4      Any dispute about the operation of this clause is to be dealt with in accordance with the disputes procedure in this Agreement.

1. Clause 33 of the Agreement contains a settlement of disputes procedure. The procedure applies to “any dispute or grievance that arises at the workplace between an Employee and Linfox and/or Linfox and the TWU about the Agreement or the employment relationship (including, for the avoidance of doubt, in relation to the NES)”. The procedure sets out the steps that must be taken at the workplace to attempt to resolve the dispute, the capacity to refer unresolved disputes to the Commission for conciliation, and if the dispute remains unresolved, for determination by the Commission by arbitration. Pursuant to clause 5.4, disputes about the operation of clause 5 above are also to be dealt with under the procedure in clause 33.

1. Clause 34 of the Agreement is concerned with making new local matters agreements and changes to existing local agreements and relevantly provides as follows:

34.1     If, during the life of this Agreement, a new local matters agreement is made or changes are required in respect of existing local agreements made under this clause, the new local agreement or changes to existing local agreements must be agreed between the parties. To be effective, any review, creation or variation of a local matters agreement under this clause 34 must be:

(i)        in writing;

(ii)       approved by a majority of the Employees at the specific worksite; and

(iii)      signed by the Linfox General Manager Workplace Relations and the Secretary of the relevant Branch of the Union.

34.2     On approval of the agreement a local matters agreement cannot be made that affect any wage rate increases arising from clause 44.

2018 Local Matter Agreement Review

34.3     In accordance with clause 34.1, the Linfox Workplace Relations Team will schedule and attend meetings within the first six (6) months of the Agreement, with a view to assess proposed local matters agreements on the following basis:

. . .

1. It is uncontroversial that in so far as the disputed payments are concerned, the process contemplated in clause 34.3 did not occur within the first six months of the Agreement, nor has the process been undertaken since. Clause 34.4 provides as follows:

Employees to Be No Worse Off

34.4     Linfox will ensure that no Employee is worse off as a result of: (a) the review referred to in clause 34.3; (b) the creation of a new local matters agreement under clause 34.1; or (c) the variation of an existing local matters agreement under clause 34.1.

. . .

1. Clause 5.1 is not concerned with a custom that forms the basis for the implication of terms into a contract in the sense discussed by the High Court in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd.[20] A term implied into an employment contract on the basis of custom would be incapable of ouster by an enterprise agreement. Parties to an employment contract would remain bound by its terms, including any implied term notwithstanding any contrary and less beneficial provision in an operative and applicable enterprise agreement. Properly construed, the reference to “custom and practice” in clause 5 of the Agreement, is a reference to “industrial custom and practice” as coined by the Full Bench in Paull and Ors v Linfox Australia Pty Ltd.[21] In Paull, the Full Bench made the following obiter observations:

[34]     First, a contention that there was in existence a custom and practice for the purposes of clause 5 would require consideration of that provision in the context of the Agreement as a whole, applying the principles summarised in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Limited (Berri). The expression ‘custom and practice’ is widely used in industrial instruments, but it does not have a set meaning. There is a fundamental conceptual question as to the ‘threshold’ that must be reached in order for an activity or state of affairs to be a ‘custom and practice’, in terms of uniformity, time and substance. In our view, a custom and practice is something more than simply anything that has been regularly done (or not done) in the past. The mere fact that employees have never previously performed a certain task is not likely to be sufficient to establish that there is a ‘custom and practice’.

[35]     Further, in an industrial setting, it is often the case that a custom and practice is something that has emerged from an industrial arrangement or settlement, and which is acknowledged by those who were party to or involved in it. We note that the second principle in Con-Stan would probably capture many circumstances that could be described as a ‘custom and practice’ preserved through enterprise agreements – namely, adapting the words, something that is ‘so well-known and acquiesced in that everyone [voting to approve an enterprise agreement] in that situation can reasonably be presumed to have imported that term into [the enterprise agreement].’ This formulation has some appeal in the setting of enterprise agreements; unless the custom and practice is notorious, there will be doubt about whether employees (particularly more recently hired employees) voting on the agreement understood that it was embraced by any reference to ‘custom and practice’ in the instrument. [Endnote omitted]

1. We generally agree with these observations, but we stress that the Full Bench in Paull was not seeking to set out any strict rule for identifying whether a particular practice was an industrial custom and practice. We would add that in light of the legislative provisions for making and approving an enterprise agreement it is to be doubted that there is any room for the implication of terms into an enterprise agreement by reason of custom and practice when it is made or otherwise.[22] Nor could such implied terms later arise given the manner in which an enterprise agreement may be varied. No party suggested otherwise. To that extent the attempted reformulation in Paull of one of the factors in Con-Stan by reference to importation of “that term into [the enterprise agreement]” is inexact. In our view the obiter observations in Paull were intended to underscore the fact that an industrial custom and practice is something more than simply anything that has been regularly done. This is plainly correct since the practice of making certain payments might also arise or be explained by inadvertence on the part of those responsible for making the payments, or an act of generosity on the part of the employer, from which it has now resiled. And neither could, without more, sensibly be found to be an industrial custom and practice.

1. We agree with Linfox’s contention that clause 5.1 of the Agreement does nothing more than provide that the Agreement does not alter a custom or practice that is applicable to the parties. It does not in terms protect a custom and practice from otherwise being altered. The plain text of clause 5.1 makes this clear by providing that “[T]his Agreement is not intended to, nor shall it, alter a custom and practice applicable to the parties.” In the result, the Agreement should not be construed and is not to be applied in a manner that alters an existing custom and practice. That is any custom and practice that existed when the Agreement was made.

1. Clauses 5.2 and 5.3 of the Agreement set out a procedure for the ‘parties’ to attempt to reduce any custom and practice to writing during the life of the Agreement and for reviewing and if agreed, creating local agreements from “the custom and practice”. That is, from the custom and practice reduced to writing under clause 5.2. The procedure for making new local agreements and altering existing local agreements is set out in clause 34.

1. Clause 5.4 requires disputes about the operation of clause 5 to be dealt with in accordance with the dispute settlement procedure in clause 33 of the Agreement. Such disputes may include a dispute about whether a particular practice is a custom and practice for the purposes of clause 5 and disputes about the way a custom and practice is to be recorded in writing.

1. Properly construed, clause 5 does not and cannot have the effect for which the TWU contends. If the effect of clause 5.1 is to preserve extant industrial customs and practices which cannot unilaterally be altered, then one is required to strain the express language used in the clause. This is so even when allowance is made for inexactness of those drafting the provision who likely would have had a practical, rather than legal, bent. Moreover, as Linfox points out, there would be no utility in expressing an intention to reduce to writing any custom and practice applicable to Linfox and employees covered by the Agreement as set out in clause 5.2, or in creating a local agreement arising from the custom and practice in accordance with clause 34 as set out in clause 5.3, if such custom and practice is in perpetuity (or at least until a replacement agreement is made) binding by the operation of clause 5.1 regardless of whether it was reduced to writing or agreed in a local matters agreement.

1. The contextual matters to which the TWU points do not assist its contended construction for the reasons which follow.

1. First, the TWU contends that because disputes about customs and practices are, by clause 5.4, to be dealt with by the Commission including by a binding power of private arbitration, the parties contemplated that any contentious matters arising from customs and practices would be dealt with in a determinative fashion by the Commission. This is true, but the extent to the Commission’s function and powers will be, as clause 5.4 makes clear, to resolve any “dispute about the operation of” clause 5. To do so, one must first identify how clause 5 operates. Clause 5.1 does no more than to protect customs and practices existing when the Agreement was made from alteration by the Agreement or from the Agreement being applied in a manner that alters an existing custom and practice. A dispute about whether unilateral action by Linfox to alter an existing custom or practice unconnected with a term of the Agreement or its application would not be a dispute about the operation of clause 5. Disputes might also arise about whether a practice is a “custom and practice” for the purpose of determining whether the practice should be reduced to writing and processed through clause 34.

1. Second, the TWU says that clause 34.4 manifested a plain intention that Linfox would not be able to unilaterally alter extant customs and practices. It says that it would be incongruous if the parties were precluded from negotiating a local matters agreement that dealt with customs and practices and could not leave employees worse off, but if agreement was not reached (or if negotiations did not occur as envisaged by clause 34.3), Linfox could determine to make employees worse off by altering applicable customs and practices. Such a result, according to the TWU would be irrational and if clause 5.1 did not operate to preserve customs and practices Linfox would have had no incentive to negotiate as a local matters agreement as it could unilaterally alter those customs and practices to employees’ detriment and its benefit.

1. Clause 34.4 does not have the effect for which the TWU contends. It is confined to ensuring that no employees are worse off as a result of a review referred to in clause 34.3, the creation of a new local matters agreement or the variation to an existing local matters agreement under clause 34.1. As we have earlier noted, a review under clause 34.3 has not occurred and no relevant new local matters agreement or variation to an existing local matters agreement has been made. In order for a local matters agreement to be made in relation to an existing custom or practice “the parties” must first agree to create such a local agreement. So much is clear from clause 5.3. Clause 34.4 does not operate upon a custom and practice which is not reduced to writing in a local matters agreement.

1. Moreover, the TWU’s proposition that on the Commissioner’s construction there would be no incentive on Linfox to negotiate a local matters agreement is incorrect. As is clear from clause 5.3 the parties are required to “review” and at least attempt to agree to create a local agreement arising from the custom and practice reduced to writing under clause 5.2. The dispute settlement procedure as clause 5.4 makes clear, may be used if there is a dispute about this process. There is no evidence that any attempt to use the procedure in clauses 5.2 and 5.3 has been made. In our view a disincentive to negotiate a local matters agreement would arise from the construction of clause 5.1 for which the TWU contends. If unwritten custom and practice that existed at the time the Agreement was made is protected from unilateral action then what need is there for a local matters agreement to deal with the custom and practice?

1. Similarly, there is nothing ‘irrational’ in the Commissioner’s construction. Clause 5 of the Agreement contemplates that any custom and practice existing at the time the Agreement was made will not be altered by the Agreement, that there will be negotiations or discussions about existing customs and practices and an attempt to agree to reduce a custom and practice to writing. Where this is done, if the parties agree a local agreement may be created arising from the custom and practice. The process in clause 5 is supported by a capacity to invoke the dispute settlement procedure, and in clause 34.4 by ensuring that any local agreement that is made arising from a custom or practice will not result in employees being left worse-off. If an agreement cannot be made through the clause 5 process, the custom and practice is left alone by the Agreement and may be discontinued by Linfox unless the custom and practice is otherwise enforceable.

1. Two further matters should be addressed. The first is the TWU’s contentions that the Commissioner’s construction rendered clause 5.1 inutile and that it is capricious, absurd and unreasonable. These are rejected. Clause 5.1 has a clear but limited operation. It recognises that there existed at the time the Agreement was made customs and practices which applied to the “parties”. It protects those customs and practices from alteration by the Agreement and from the application of the Agreement in a manner that alters any existing custom and practice. It is thus not inutile. Similarly, a construction that clause 5.1 extends no further than its express terms and that it does not operate to preserve an unwritten custom and practice is not capricious, absurd and unreasonable. It is not only an available construction but in our view, the correct one. Clauses 5.2 and 5.3 set out how custom and practice might be preserved, but this has not occurred. Because it is beyond the scope of this appeal, we do not express a view about whether custom and practice recorded in a local agreement pursuant to clause 5.3 and 34.1 has the result of making the local agreement an enforceable term without first varying the Agreement to include the local agreement in accordance with Division 7, Part 2 – 4 of the Act, although there must be doubt.

1. The second concerns the TWU’s reliance on two decisions of Commissioner Roberts in Transport Workers’ Union of Australia v Linfox Australia Pty Ltd^[23] (the Telephone Allowance case) and Transport Workers’ Union of Australia v Linfox Australia Pty Ltd[24] (the Public Holiday case). These concerned local customs and practices said to apply to particular Linfox sites. Commissioner Roberts determined that particular customs and practices existed at the specific sites forming the subject of each dispute and that clause 5 of the Linfox and Transport Workers Union Transport and Distribution Centres Agreement 2014 (2014 Agreement), which in terms together with clauses 33 and 34.1 were similar to the provisions in the Agreement, operated to prevent Linfox from unilaterally altering those customs and practices. Clause 34.1 of the 2014 Agreement did not require new local matters agreements to be in writing or to be signed by the identified individuals as is required by clause 34.1 of the Agreement.

1. To the extent that Commissioner Roberts concluded in the Telephone Allowance case that “Clause 5 makes it clear that such local arrangements [referring to a local custom and practice] cannot be altered unilaterally”[25] and in the Public Holidays case that by reason of clause 5 “Linfox was not entitled to vary the custom and practice arrangements relating to public holidays”[26], we consider that Commissioner Roberts’ construction underpinning the operation of clause 5 was incorrect. Neither decision contains any analysis about the proper construction of clause 5 and the conclusion reached is contrary to the express words found in clause 5.1 of the 2014 Agreement.

1. For these reasons, we consider the Commissioner’s construction of clause 5.1 of the Agreement was correct. It follows that grounds 1, 2 and 3 of the TWU’s notice of appeal fail. We would also observe that our construction of clause 5 of the Agreement is consistent with that adopted by in Paull and Ors v Linfox Australia Pty Ltd[27](Paull No 2). In Paull No 2 the Full Bench dismissed an appeal against a decision of Commissioner Lee in which he decided that the practice at issue in that case was not an industrial custom and practice for the purpose of clause 5 of the Agreement. He also concluded in the alternative that if the practice was an industrial custom and practice for the purpose of clause 5, Linfox was not prevented from discontinuing that custom and practice. The Full Bench said that it was “wholly satisfied that the Commissioner correctly answered the questions posed to him for determination”.[28] The construction we prefer underpins that conclusion.

1. As to ground 1 of the Linfox appeal, Linfox contends that although the Commissioner correctly construed clause 5.1 as not preventing it from unilaterally ceasing the disputed payments, he erred in finding that the making of the disputed payments to affected linehaul drivers constituted an industrial custom and practice. We have earlier summarised Linfox’s contentions but in essence it says the disputed payments it made were properly to be categorised as discretionary. It says that the Commissioner failed to address the fundamental conceptual question, namely:

“. . . as to the ‘threshold’ that must be reached in order for an activity or state of affairs to be a ‘custom and practice’, in terms of uniformity, time and substance . . . a custom and practice is something more than simply anything that has been regularly done (or not done) in the past.”[29]

1. Linfox contends that an element of substance the Commissioner was required to consider (and one he failed to consider) was whether the conduct said to constitute the relevant custom or practice had achieved acceptance between the parties as a mandatory or obligatory feature of their relationship. We take this submission to be directed to an acceptance by the parties of a mandatory or obligatory feature of the relationship, in the sense that the parties came to believe that the disputed payments were obligatory in a way that fell short of a legal obligation. A legal obligation to make the disputed payments would only arise if the disputed payments were an express or implied term (that is a term implied in fact[30] – there being no suggestion the term would be implied in law) of the employment contracts of each affected linehaul driver, a term implied into the contracts by custom and practice (to which we will later come in this decision), part of the policy that was incorporated into the relevant employment contracts or enforceable as a term of the Agreement.

1. Whilst we accept that an acceptance between the parties that the disputed payments were a mandatory or obligatory feature (falling short of the legal obligation) of the relationship may be relevant in establishing whether the disputed payments were custom and practice within the meaning of clause 5 of the Agreement, we do not accept that this is a mandatory consideration the Commissioner was required to take into account. As the TWU points out, insofar as the question of acquiescence is considered in determining whether particular custom and practice is presumed to be imported into a contract, it is not necessary that the custom and practice is universally accepted because to do so would have the result of the acquiescence requirement being defeated by one party and denying the very thing the other seeks to establish. Similarly, imposing a mandatory requirement that there be evidence of an acceptance between the parties that the disputed payments were a mandatory or obligatory feature of the relationship before the disputed payments could be regarded as custom and practice within the meaning of clause 5 would result in the same consequence, namely that Linfox could defeat the claim merely by denying that it considered the disputed payments to be mandatory or obligatory.

1. Although Linfox challenges the Commissioner’s ultimate factual finding that making the disputed payments was a custom and practice within the meaning of clause 5 of the Agreement, it does not challenge any relevant factual finding made by the Commissioner on which he relied to fortify his conclusion. Rather it points to several factual findings which it says are inconsistent with his ultimate conclusion. These inconsistent findings are said to be the findings that:

·  the claims for payments by individual affected linehaul drivers were not uniform and subject to case by case challenges’ (albeit that the payment practice was generally consistent);[31]

·  the Deed:

oincorporated only a subset of non-driving duties payments;[32] and

omade ‘unambiguously clear’ that no payment would be made to drivers in relation to time taken to complete pre-trip vehicle checks, which was one significant component of the non-driving duties for which payments were made and the non-driving duties payments ‘directly contradicted’ this term in the Deed;[33]

·  the expansion in the non-driving duties payments arose from ‘a combination of coercive demands from local drivers’ representatives and submissive acquiescence of local managers’;[34]

·  there had been attempts to create new local matters agreements reflecting the non-driving duties payments, but these did not succeed;[35] and

·  there was ‘extensive, ongoing argument’ about the non-driving duties payments[36] including in disputes brought before the Commission in 2012 and 2015.[37]

1. The contention of inconsistent findings is rejected for the following reasons. First, it is evident that these findings are made in the course of the Commissioner’s consideration whether the making of the disputed payments was a term implied into the employment contracts of the relevant linehaul drivers by custom and practice. Though these findings are also relevant in assessing whether the making of the disputed payments amounted to a custom and practice within the meaning of clause 5 of the Agreement, on a fair reading of the Commissioner’s decision, it is evident that he regarded other factors as weighing more heavily in the balance in concluding that the disputed payments practice was a custom and practice within clause 5. So much is clear from [63] of the decision in which the Commissioner said:

[63]     Although the payments to Chullora linehaul drivers for the non-driving duties did not satisfy all of the Con-Stan elements, when the evidence of its long standing operation, its notoriety, and its continuation including after various challenges involving Commission proceedings in 2012 and 2015, is carefully examined, it does represent an industrial custom and practice. This finding has been made upon the evidence of the extensive, ongoing argument and recognition provided for the payments to Chullora linehaul drivers for the non-driving duties, when considered in context of the 2018 EA as a whole, and applying the Berri principles so as to establish the correct construction to be given to the terms “custom and practice” used in clause 5 of the 2018 EA. [Emphasis added]

1. Secondly, we agree with the TWU that the fact that claims for payments by individual affected linehaul drivers were not uniform is not a particularly significant matter when different drivers performed different work and, consequently, made different claims. Moreover, as the Commissioner explained, though the claims for payments by individual drivers were not uniform and subject to case by case challenges by Linfox, “these individual variations were matters of detail and distinct from the general operation of the practice of payment in respect to the non-driving duties”.[38] This aspect of the Commissioner’s finding is not challenged on appeal and places the earlier findings in context. Plainly the Commissioner did not regard the earlier findings as detracting from the general operation of the practice.

1. Thirdly, for the reasons earlier given, we propose quashing [79] and [90 3.] of the Commissioner’s decision. For similar reasons the findings about the effect of the Deed which Linfox says are inconsistent with a finding of custom and practice are also not sound and should not have been made. Moreover, Linfox says confidently that the Deed as incorporated into the Agreement has no application to the affected linehaul drivers and it seems more than odd that it relies on a conclusion which it says is wrong to make good its inconsistency point.

1. Fourthly, the factual finding that the payments arose from ‘a combination of coercive demands from local drivers’ representatives and submissive acquiescence of local managers’ is no more than a description of how the payments came to be made. As we later note in our discussion of ground 4 of the TWU appeal, we do not consider there is any basis for any claims made for the disputed payments to be described as “coercive”. Nevertheless, it is clear that the Commissioner found that claims or demands for payments were made and these were acquiesced in by local managers. As the Full Bench in Paull observed “in an industrial setting, it is often the case that a custom and practice is something that has emerged from an industrial arrangement or settlement, and which is acknowledged by those who were party to or involved in it.”[39] That a custom and practice evolved from a combination of demands or claims and submissive acquiescence is consistent with these observations and is not in our opinion inconsistent with the Commissioner’s ultimate factual conclusion that the making of the disputed payments was a custom and practice within the meaning of clause 5 of the Agreement.

1. Fifthly, the finding that there had been unsuccessful attempts to create new local matters agreements reflecting the non-driving duties payments is not inconsistent with a conclusion that there was a custom and practice reflecting the making of the disputed payments. The last such attempt appears to have been made in or around July 2019 when Linfox released a proposed Local Matters document for each State following several consultative meetings with site delegates and the TWU across New South Wales, Victoria, South Australia and Queensland. Each Local Matters document outlined the circumstances in which Linfox would continue to pay non-driving payments.[40] The relevant local matters agreement, which concerned non-driving duties payments, was sought to be made under clause 34 of the Agreement[41] and proposed payments for non-driving duties on a narrower basis than those the subject of the dispute.[42] The linehaul drivers at Chullora elected not to vote and the linehaul drivers in the Central West voted against the proposed local matters agreement.[43] Had a local matters agreement been made, this might have had the effect of extinguishing the custom and practice alleged but that the attempts were unsuccessful does not mean that the custom and practice did not exist. In any event the Commissioner’s finding is made, as [61]-[62] of the decision make clear, to illustrate that there were attempts to codify in a local matters agreement “the expanded non-driving duties”[44] which had “expanded beyond the documented provisions of the . . . Deed”,^[45] and to fortify his conclusion in the first sentence of [62], which for the reasons earlier set out, cannot not be sustained.

1. Sixthly, on a contextual reading, the Commissioner’s conclusions at [63] of the decision that there was “extensive, ongoing argument” and disputes in the Commission about the non-driving duties payments, are made to underscore his conclusion that there was acquiescence. This is clear from the introductory words “its continuation including after various” appearing before the findings. The Commissioner is saying no more than after some disputation Linfox acquiesced.

1. Finally, the Commissioner’s finding that the disputed payments were acquiesced in by Linfox is also supported by the administrative procedure it adopted to process claims by the affected linehaul drivers for the disputed payments. For example, by memorandum dated 15 July 2015, Mr Warrick Irvine, the Sydney ranch Manager – Linehaul wrote to drivers in the following terms:

“Effective immediately the detail that relates to claimed EBA Hours must be included on the Linehaul Trip Sheet each day.

This will allow for accurate processing of claimed EBA Hours.

EBA Hours without detail will not be processed.[46]

1. The tone and substance of this communication also tells against Linfox’s contention that the disputed payments were not a mandatory or obligatory feature (falling short of the legal obligation) of the relationship.

1. But even if it could be said that some of the Commissioner’s conclusions were inconsistent with his ultimate factual conclusion, it is clear from [63]-[65] of the Commissioner’s decision that he undertook an evaluative balancing exercise of the evidence as a whole in reaching his conclusion. The Commissioner plainly regarded the “evidence of the [disputed payments’] long standing operation, its notoriety, and its continuation including after various challenges involving Commission proceedings in 2012 and 2015” as matters of significance. In our view the factual conclusion the Commissioner reached was one that was open to him upon the evidence and on appeal should not be disturbed.

1. It follows that ground 1 of the Linfox appeal fails.

Ground 6 of the TWU appeal - the disputed payments was a term implied by custom and usage into each affected linehaul driver’s employment contract.

1. As earlier noted, the TWU advances 3 bases underpinning this ground, the first two of which (procedural fairness and the incorporated cl 1.24 of the Deed) we have dealt with already.

1. As to the third basis, the Commissioner concluded that as each of the affected linehaul drivers’ employment contracts contained a provision which stated inter alia that the contract “sets out the entire understanding and agreement between the parties with respect to the terms and conditions of the employment . . .”, the term for which the TWU contended will not be implied into the contracts on the basis of custom and practice as it was contrary to the express terms of the contracts. The TWU contends the Commissioner’s reliance on the entire agreement clause of the employment contracts was misplaced. It says there are no terms of the affected linehaul drivers’ employment contracts dealing with the subject matter of payment for non-driving duties, and so, there are no terms which are inconsistent with the asserted implied term.

1. We do not agree. We accept, as Linfox contends, that the entire agreement clause is a complete answer to the TWU’s case for an implied term, but not in respect of all the affected linehaul drivers. The positions of Pickering, Poulson, Mastronardo, Waltis and Kelly warrant some further comment.

1. The implication of a term into a contract on the basis of custom or usage arises from a presumed agreement which is derived from pre-contractual events and circumstances. That is, it arises from a custom that is so notorious and acquiesced in that everybody entering into a contract in that situation can reasonably be presumed to have imported that term into the contract. In the face of the entire agreement provision in the contracts of most of the affected linehaul drivers the presumption that the custom and usage term is imported cannot survive and must give way to the express contrary term found in the entire agreement provision of those contracts. The purpose of the entire agreement provision of the contracts is to ensure that only the express terms of the contract operate leaving no room to imply into the contract other terms by reference to pre-contractual events and circumstances.

1. As to the positions of Pickering, Poulson, Mastronardo, Waltis and Kelly, on the evidence, the TWU contended that since the end of 2007 it had been custom and practice in the New South Wales linehaul business of Linfox for the payment of “EBA hours” for the non-driving duties.[47]

1. As should be clear from the judgment in Con-Stan a custom and practice relied on as the basis for implying a term into a contract must be so well-known and acquiesced in at the time the contract is made, so that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract.[48] Thus the custom and practice relied on must in that form exist when the contract into which the term is said to have been imported is made.[49]

1. Pickering entered into a written contract on 23 December 2002,[50] although his employment appears to have commenced earlier on 6 August 2002. No other contract is in evidence and there is no suggestion that another contract was made. The date the contract was made preceded the emergence of the custom and practice alleged.

1. Poulson entered into a contract of employment on 6 September 2007.[51] That document facilitated a transfer of his employment from a company acquired by Linfox to Linfox.[52] The document states, inter alia, that apart from changes to policies that are applicable and workers compensation arrangements the same terms and conditions of employment that applied to Poulson in his employment with the acquired company would continue.[53] That contract appears to have continued until Poulson entered into a further contract on 24 May 2010 which contained an entire agreement provision.[54] Until this point, Poulson’s governing contract of employment was made before the time the custom and practice is said to have been relevantly established. Implication of the custom or practice as a term could therefore not have arisen. Thereafter for the reasons stated above the entire agreement provision of Poulson’s May 2010 contract is incompatible with the implication of the term for which the TWU contends. Poulson entered into a further contract on 1 July 2010 which also contained an entire agreement provision[55] the effect of which is as we have stated.

1. The position of Mastronardo is not as clear. He appears to have commenced employment in August 2006[56] but the only written contract of employment into which he entered in evidence was made on 28 September 2010.[57] That contract contained an entire agreement provision and for the reasons already stated the provision is incompatible with implication of a term on the basis of custom and practice. During the earlier period Mastronardo’s employment may have been governed by another written contract which is not in evidence or an oral contract. Such a contract was likely to have been made before or contemporaneously with the commencement of his employment. When Mastronardo commenced his employment the custom and practice alleged had not emerged.

1. Waltis entered into a contract of employment on 15 May 2007[58] at a time before, on his own evidence, the custom and practice relevantly is said to have emerged. Kelly commenced employment on 28 June 2007[59], which was also at a time before the custom and practice relevantly is said to have emerged. He entered into a written contract of employment on 21 August 2012[60] which contained an entire agreement provision and was incompatible with the implication of the term alleged.

1. Thus, none of Pickering, Poulson, Mastronardo, Waltis or Kelly can on the evidence maintain a claim that their employment contracts contain an implied term as to the disputed payments by reason of custom and practice.

1. At the time the dispute was determined by the Commissioner the only contracts into which the term could be implied were those operative written contracts entered into by the affected linehaul drivers each of which contained an entire agreement provision, the effect of which is incompatible with the implication of the term alleged. Most of the operative contracts were made after the disputed payments as a custom and practice were said to have commenced. The entire agreement provision in those contract puts an end to the custom and practice implied term contention. The contended for term cannot be implied into any contract of employment which continues to operate but was made before the custom and practice is said to have commenced.

1. For these reasons, we consider the Commissioner correctly construed the effect of the entire agreement term of the contracts made after the practice was said to have emerged and correctly concluded that implication of a term as to the disputed payments on the basis of custom and practice was contrary to the express terms of the contracts. To the extent there was a different basis to dispose of the contention as discussed above is of no moment because the result is the same. Ground 6 of the TWU’s notice of appeal in this regard fails.

1. It also follows that although the TWU’s denial of procedural fairness aspect of ground 6 of its appeal is made out, it does not provide a basis for quashing the Commissioner’s decision that there was no implied term.

Grounds 5, 7 and 8 of the TWU appeal - conventional estoppel

1. The TWU contended before the Commissioner that Linfox was estopped from departing from an adopted common assumption that the disputed payments were terms of the legal relationship between each affected linehaul driver and Linfox. It is common ground that to make good its conventional estoppel contention the TWU would need to establish in each case that the affected linehaul driver adopted an assumption as to the terms of their legal relationship with Linfox; that Linfox adopted the same assumption; that both parties conducted their relationship on the basis of the mutual assumption including that each party knew or intended that the other would act on that basis of the mutual assumption; and that a departure from the assumption by Linfox will occasion detriment to the relevant affected linehaul driver.[61]

1. The Commissioner rejected the contention on the basis that the evidence of repeated attempts by Linfox to challenge the payments demonstrated that there was no common assumption upon which the principles of conventional estoppel could be established.[62] The TWU says that that conclusion was factually erroneous. It contends that the only occasions Linfox had challenged its obligation to make payments were in 2012 and 2015 when it had only challenged its obligation to pay the loaded hourly rate for pre and post-trip inspections. It says that Linfox’s challenges to the contended for mutual assumption pertained only to 2 of the 10 non-driving duties and says that though Linfox had raised issues about payments for pre and post-trip inspections in 2012 and 2015, it had ultimately acquiesced and continued making such payments. This conduct, according to the TWU, was entirely consistent with an assumption that payments were required to be made.

1. We consider that the Commissioner’s conclusion was open to him on the evidence. Apart from the 2012 and 2015 proceedings, the following evidence given below also supports the Commissioner’s conclusions:

·  some linehaul drivers knew that Linfox from time to time had disputed that it had to make the disputed payments;[63]

·  the TWU and local management on site had been told on “numerous occasions” by Linfox over the years that the disputed payments must stop;[64]

·  Linfox disputed that a local matters agreement dealing with some of the disputed payments[65] was agreed or that it had any effect;[66]

·  Linfox did not regard itself as being obligated to make the disputed payments[67] and had made this view known to the TWU and the affected linehaul drivers on several occasions;[68]

·  Waltis’ evidence was that he was in no doubt that Linfox’s position on the disputed payments was that it was not agreeing to make payments other than those for which provision was made in an operative enterprise agreement;[69]

·  Pickering’s evidence that he understood that Linfox’s position was that although they might be making the disputed payments it did not believe or agree that it was required or obliged to make payments;[70]

·  Mastronado gave evidence that he had been told by Pickering and by Waltis from time to time that Linfox was disputing whether it had to pay all of the disputed payments.[71]

1. Taken as a whole, on the evidence before the Commissioner it was open for him to conclude that there had been repeated attempts by Linfox to challenge the payments and that this demonstrated there was no common assumption.

1. As to the other matters raised under these appeal grounds, as earlier noted the Commissioner mentioned but did not decide the jurisdiction question raised by Linfox. Instead, he determined the substance of the TWU’s conventional estoppel contention. The TWU’s contention that the Commissioner determined erroneously that there was no foundation pursuant to the power of private arbitration accorded by clause 33.1(e) of the Agreement to determine whether a conventional estoppel precluded Linfox from departing from the contended for common assumption, cannot be maintained.

1. The contention that the Commissioner failed to properly engage or otherwise consider the TWU’s case on conventional estoppel is also rejected. At [27] and [39] of the decision, the Commissioner summarised the competing contentions on the issue. At [66] the Commissioner concluded that there was on the evidence an absence of a common assumption and set out briefly the relevant evidence. As we point out above, there was also other evidence which supported his conclusion. Having so concluded it was not necessary for the Commissioner to deal with the other elements of conventional estoppel since all the elements must be present.

1. For these reasons appeal grounds 5, 7 and 8 of the TWU appeal fail.

Ground 4 of the TWU appeal

1. The TWU takes issue with the Commissioner’s conclusion at [60] of the decision that “the nature and extent of the non-driving duties which were claimed by the drivers and paid by Linfox ‘grew like topsy’” and that they seemed to arise from “a combination of coercive demands from local drivers’ representatives and submissive acquiescence of local managers”.

1. Whilst it may be accepted that there is no evidence that any claims for the disputed payments that were made could properly be described as “coercive” demands, it does not appear to us that the matters discussed by the Commissioner at [60] of the decision had any material effect on the Commissioner’s ultimate conclusion. Paragraph [60] appears in the context of the Commissioner’s consideration of the TWU’s contention that the custom and practice of making the disputed payments was a term implied into the employment contracts of each of the affected linehaul drivers. Properly understood the Commissioner’s observation is made to explain how the disputed payments came to embrace non-driving duties beyond those identified in paragraph 8 of clause 1.24 of the Deed. Relevantly, the Commissioner ultimately concluded, and as we have earlier observed, correctly, the entire agreement provision in each of the affected linehaul drivers’ employment contracts was fatal to the TWU’s implied term contention. The Commissioner’s discussion at [60] could have no bearing on that conclusion.

1. As to the Commissioner’s use of the expression “growing like topsy”, this signifies no more that the Commissioner’s description of the growth in the number of the non-driving duties for which payment was claimed in comparison to paragraph 8 of clause 1.24 of the Deed. The expression “growing like topsy” is a phrase intended to signify prodigious growth. Whilst there may be room for debate about the extent of growth, there can be little doubt the number of duties for which payments are claimed under paragraph 8 of clause 1.24 of the Deed is substantially less than the number of duties particularised in the TWU’s closing submissions before the Commissioner at [29.1]. Thus, though the Commissioner might have engaged in a bit of linguistic hyperbole in adopting the phrase to make the comparison he did not make any appealable error.

1. For these reasons ground 4 of the TWU appeal fails.

Conclusion

1. As to the TWU appeal, save for that aspect of ground 6 which concerns a denial of procedural fairness, all other appeal grounds have been rejected. For the reasons earlier explained that part of ground 6 which we would uphold provides an insufficient basis to interfere with that part of the decision to which ground 6 relates. It is appropriate that the TWU appeal be dismissed.

1. As to the Linfox appeal, we have upheld ground 2 of its appeal in part and we propose to quash that part of the decision found at [79] and [90 3.] and to vary the decision by removing those paragraphs. Though the findings or observations at [14], [59], [60], [61] and [62] of the Commissioner’s decision which rely on the Deed cannot be sustained, we consider it is sufficient to simply confine our intervention to [79] and [90 3.]. We have rejected ground 1 of the Linfox appeal and so that aspect of the appeal will be dismissed.

Order

1. We order:

1.        The appeal in C2021/7273 is dismissed;

2.        Ground 2 of the notice of appeal in C2021/7282 is upheld;

3.So much of the decision as is found in [79] and [90 3.] of Transport Workers’ Union of Australia v Linfox Australia Pty Ltd[2021] FWC 6009 is quashed and the decision is varied by removing [79] and [90 3.];

4.        The remainder of the appeal in C2021/7282 is dismissed.

DEPUTY PRESIDENT

Appearances:

P Boncardo of Counsel for the TWU
Y Shariff SC and D Fuller of Counsel for Linfox

Hearing details:

2022
Melbourne and Sydney (via video)
1 February

Written submissions:

TWU, 8 December 2021 and 22 December 2021
Linfox, 8 December 2021 and 22 December 2021

[1] Transport Workers’ Union of Australia v Linfox Australia Pty Ltd[2021] FWC 6009

[2] Appeal Book 1624

[3] For example see Appeal Book 243 at [39]-[43]

[4] Transport Workers’ Union of Australia v Linfox Australia Pty Ltd[2021] FWC 6009 at [90 1., 2. and 4.]

[5] Ibid at [90 3.]

[6] Ibid at [59]-[62]

[7] Ibid at [84]

[8] Ibid at [90 2.]

[9] Ibid at [59]-[62]

[10] Appeal Book 1624

[11] Transport Workers’ Union of Australia v Linfox Australia Pty Ltd[2021] FWC 6009 at [63]-[65] and [90 1.]

[12] Ibid at [79], [90 3.] and [91]

[13] Specifically at [14], [18]-[19], [58], [59]-60], [61], and [61]-[62]

[14] See Appeal Book 1615-1628, 1632, 1636, 1656 and 190-236.

[15] Appeal Book 93-96

[16] Appeal Book 290-291

[17] Appeal Book 1624

[18] Appeal transcript PN198-PN201

[19] WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197] and the authorities referred to therein; see also King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [122]-[130] and the authorities referred to therein (The analysis of the principles of construction set out therein were not disturbed on appeal: see King v Melbourne Vicentre Swimming Club Inc [2021 FCAFC 123, 308 IR 171 at [40]-[43])

[20] (1986) 160 CLR 226 at 236 to 238

[21] [2018] FWCFB 1563

[22] See Australian Nursing and Midwifery Federationv Bupa Aged Care Australia Pty Ltd [2017] FCA 1246, [50] and the authorities cited therein

[23] [2015] FWC 2768

[24] [2016] FWC 908

[25] [2015] FWC 2768 at [74]

[26] [2016] FWC 908 at [34]-[35]

[27] [2020] FWCFB 1553

[28] Ibid at [35]

[29] Paull and Ors v Linfox Australia Pty Ltd[2018] FWCFB 1563 at [34]

[30] See BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283; See also Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 422, 442

[31] Transport Workers’ Union of Australia v Linfox Australia Pty Ltd[2021] FWC 6009 at [58]

[32] Ibid at [14]

[33] Ibid at [59]-[60]

[34] Ibid at [60]

[35] Ibid at [61]-[62]

[36] Ibid at [63]

[37] Ibid at [18]-[19], [63]

[38] Ibid at [58]

[39] [2018] FWCFB 1563 at [35]

[40] Appeal Book 1061 [64(f)]

[41] Appeal Book 1447-1448

[42] Compare Appeal Book 1447-1448 with Appeal Book 1624

[43] Appeal Book 1061 [64(i)]

[44] Transport Workers’ Union of Australia v Linfox Australia Pty Ltd[2021] FWC 6009 at [61]

[45] Ibid

[46] Appeal Book 313

[47] Appeal Book 242 at [38]

[48] (1985-1986) 160 CLR 226

[49] see Ryan v Textile Clothing and Footwear Union [1996] 2 VR 235 at 260 (per Hayne JA)

[50] Appeal Book 1472

[51] Appeal Book 1474

[52] Appeal Book 1473

[53] Ibid

[54] Appeal Book 1478

[55] Appeal Book 1484

[56] Appeal Book 1457

[57] Appeal Book 1490

[58] Appeal Book at 1496

[59] Appeal Book 1457

[60] Appeal Book 1503

[61] See for example Waterman v Gerling Australia Insurance Co Pty Ltd [2005] NSWSC 1066, (2005) 65 NSWLR 300 at [83]

[62] Transport Workers’ Union of Australia v Linfox Australia Pty Ltd[2021] FWC 6009 at [66]

[63] See Appeal Book 125-126 - PN900 – PN917

[64] See Appeal Book 145 – PN1110

[65] See Appeal Book 307-311 (JW-03)

[66] See Appeal Book 1058 [48]-[52]

[67] See Appeal Book 1059 [58]

[68] See Appeal Book 1059 [59]

[69] See Appeal Book 80-82 – PN363 – PN366

[70] See Appeal Book 111- 112 – PN735 – PN738; Appeal Book 116 – PN788

[71] Appeal Book 126 - PN907 – PN910

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