Transport Workers' Union of Australia v Linfox Australia Pty Ltd - [2014] FWC 4268

[2014] FWC 4268

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Transport Workers' Union of Australia
v
Linfox Australia Pty Ltd
(C2013/4363)

DEPUTY PRESIDENT SAMS

SYDNEY, 26 JUNE 2014

Dispute arising under the terms of an enterprise agreement - road transport industry - payment of ‘trip rates’ to specific destinations - whether shift allowances apply when drivers engaged on ‘trip rates’ - history of the relevant provisions in the Agreement - principles of interpreting industrial instruments - jurisdictional objections - Commission lacks jurisdiction - dispute not a dispute rising under the Agreement - majority of affected drivers no longer employed - meaning of the provisions clear and unambiguous - intention of the parties -‘trip rates’ paid in lieu of shift penalties - no agitation of the claims for 20 years - no industrial merit to Union claims - application dismissed - no orders made.

[1] On 14 May 2013, the Transport Workers’ Union of Australia (the ‘Union’) filed an application, pursuant to s 739 of the Fair Work Act 2009 (the ‘Act’), seeking to have the Fair Work Commission (the ‘Commission’) deal with a dispute in accordance with the Dispute Resolution Procedure in the Linfox Road Transport and Distribution Centres National Enterprise Agreement 2011 (the ‘2011 Agreement’). As will be evident from the title of the 2011 Agreement, the respondent to the dispute is Linfox Australia Pty Ltd. The Dispute Resolution Procedure under the 2011 Agreement provides as follows:

22. SETTLEMENT OF DISPUTES PROCEDURE

22.1 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) shall be dealt with in the following manner:

(a) The matter must first be discussed by the aggrieved Employee(s) directly with his or her immediate supervisor. The Employee will be advised that they may seek TWU representation, or another representative of their choice, if they choose to do so;

(b) If the matter remains in dispute, it must next be discussed with the supervisor’s immediate superior or another representative of Linfox appointed for the purpose of this procedure. The TWU delegate for the worksite has the right to attend and participate in this discussion as the representative of an Employee provided that the TWU delegate is the representative of the Employee’s choice;

manager of Linfox. The relevant TWU state secretary (or his/her nominee) has the right to attend at and participate in this discussion as the representative of an Employee provided that the relevant TWU state secretary is the representative of the Employee’s choice;

(d) If the matter remains in dispute, it must next be submitted to FWA for conciliation. For this purpose, it is agreed that the action FWA may take includes:

(i) arranging conferences of the parties or their representatives at which FWA is present; and

(ii) arranging for the parties or their representatives to confer among themselves as conferences at which FWA is not present.

(e) If the matter is not resolved in conciliation conducted by FWA, the parties agree that FWA may proceed to arbitrate the dispute and/or otherwise determine the rights and/or obligations of the parties to the dispute. In relation to such arbitration, the parties agree that:

(i) FWA may give all such directions and do all such things as are necessary for the just resolution of the dispute, including but not limited to those things set out in section 595 of the Act;

(ii) before making a determination FWA will give the parties an opportunity to be heard formally on the matter(s) in dispute;

(iii) in making its determination FWA will only have regard to the materials, including witness evidence, and submissions put before it at the hearing and will disregard any admissions, concessions, offers or claims made in conciliation.

(f) The decision of FWA will be binding on the parties subject to the following agreed matters:

(i) There shall be a right of appeal to a Full Bench of FWA against the decision, which must be exercised within 21 days of the decision being issued or within such further time as the Full Bench may allow;

(ii) The appeal will be conducted in accordance with the legal principles applying to an appeal;

(iii) The Full Bench shall have the power to stay the decision pending the hearing and determination of the appeal.

22.2 The decision of the Full Bench in the appeal will be binding upon the parties.

22.3 Until the matter is resolved by agreement, conciliation or arbitration, work will continue in accordance with the status quo. No party is to be prejudiced as to the final settlement by the continuance of work in accordance with this procedure.

22.4 The parties must co-operate to ensure that these procedures are carried out
expeditiously. The parties undertake to resolve any disputes in a timely manner in
accordance with the disputes procedure.

22.5 To avoid doubt, this dispute resolution procedure shall not be used to resolve unfair dismissals or adverse action claims.

[2] The Union sought the arbitration of the dispute in accordance with cl 21.1(e) of the Dispute Resolution Procedure and sought the following amended outcome:

‘A finding that the employees of Linfox operating out of the Warnervale yard under the ‘trip rates’ arrangement are entitled to a shift allowance as per the relevant agreement.’

[3] The arbitration of the dispute focused on a number of Clauses in the 2011 Agreement; namely, cl 7, cl 26, cl 51 and cl 80.2 which I set out respectively as follows:

[4] Cl 7 defines various terms. Relevantly,

(a) NSW Common Law Deed means the agreement between Linfox and the TWU called the “Linfox - TWU New South Wales Agreement” signed on 23 November 2007; and

(b) NSW/ACT 2007 agreement means the Linfox New South Wales (Transport, Distribution Centres and Waste) Agreement 2007, as at the application date.

[5] ‘26. TRIP RATES’

26.1 Subject to approval of the appropriate Linfox manager, trip rates can be negotiated to suit the particular needs of the customers, Linfox or the task.

26.2 Where it is agreed that such work shall be performed by Employees, a written schedule of work, destinations, distances and trip rates shall be prepared and held on file in Linfox’s offices and such work and trip rates shall apply in lieu of the provisions of this Agreement (such as base rates of pay, shift penalties and overtime). The trip rates shall be no less than the amount the Employee would have received under this Agreement for the work performed.’

51. SHIFT WORK

51.1 Clause 24 of the Road Transport Award is incorporated into this Agreement for all Employees, except that:

(a) clause 51.2, Definitions, of this Agreement replaces clause 24.1 of the Road Transport Award;

(b) clause 51.3, Shift Work – Allowances, replaces clause 24.3. of the Road Transport Award.

51.2 Definitions

(a) "Early Morning Shift" shall mean a shift which commences at or after 4.00 am and before 5.00 am.

(b) "Afternoon Shift" shall mean a shift which commences after 10.00 am and at or before 4.00 p.m.

(d) "Shift Work" shall mean work extending for at least four weeks and performed either in daily recurrent periods or in regular rotating periods within the limits defined for "Early Morning Shift" or "Afternoon Shift" or "Night Shift".

51.3 Shift Work - Allowances

For ordinary hours of shift work, shift workers shall be paid the following extra percentages of the rates prescribed for their respective classifications:

(a) Early Morning Shift: 12.5%

(b) Afternoon Shift: 17.5%

[6] Division 1 - New South Wales and Australian Capital Territory

80.1 ...

80.2 Subject to clauses 80.3 and 80.4, the following terms are incorporated into this Agreement:

(a) for Employees based at a Site listed under the heading ‘NSW/ACT 2007 Agreement Sites’ in Appendix 5 to this Agreement: Appendix 3 - NSW Wage Rates and clause 4.2 of the NSW/ACT 2007 Agreement;

(b) for Employees covered by the Linfox New South Wales (Transport & Distribution Centres) Transitional Agreement 2009: Appendix 2 - NSW Wage Rates and clause 4.2 of the Linfox New South Wales (Transport & Distribution Centres) Transitional Agreement 2009;

(c) for Employees covered by the Linfox New South Wales (Bunnings Transport) Agreement 2008: Appendix 3 - NSW Wage Rates of the Linfox New South Wales (Bunnings Transport) Agreement 2008;

(d) for Employees covered by the Linfox Rail Linehaul New South Wales (Transport & Warehousing) Agreement 2007: Appendix 3 - NSW Wage Rates of the Linfox Rail Linehaul New South Wales (Transport & Warehousing) Agreement 2007;

(e) for Employees covered by the Linfox New South Wales (Procter & Gamble Distribution Centre) Agreement 2008: Appendix 3 - NSW Wage Rates and Appendix 4 - Local matters of the Linfox New South Wales (Procter & Gamble Distribution Centre) Agreement 2008;

(f) for Employees covered by the Linfox New South Wales (National Foods Distribution Centre) Agreement 2009: Appendix 3 - NSW Wage Rates of the Linfox New South Wales (National Food Distribution Centre) Agreement 2009;

(g) for Employees covered by the Linfox New South Wales (CDC Transport) Agreement 2008:

(i) Appendix 3 - NSW Wage Rates:

(ii) Part 4.2 Wage increases; and

(iii) the agreement between Linfox and the TWU called the ‘Agreement between Linfox Australia Pty Ltd (CDC Contract) and Transport Workers Union of New South Wales’ signed in July 2008;

(h) for Employees covered by the Linfox New South Wales (BOC) Agreement 2009:

(i) Appendix 3 - NSW Wage Rates; and

(ii) clause 9.1 - Local Matters,

of the Linfox New South Wales (BOC) Agreement 2009.

For the on-call allowance incorporated from subclause 9.1.4, the allowance rate for 2010 will be increased by 4% or the CPI movement (whichever is the greater) on the first full period pay on or after 1 July in each of 2011, 2012 and, subject to this Agreement not having been terminated under clause 24, 2013 (sic).

(i) for Employees at the following Sites covered by the NSW Common Law Deed:

(i) Foster’s Fyshwick;

(ii) Foster’s Transport Rosehill;

(iii) Kmart/Target Huntingwood;

(iv) Myer Eastern Creek;

(v) Amcor Cans - Revesby;

(vi) NSW Local Transport/ Linehaul/ Sanitarium;

(vii) Arnott’s Transport Huntingwood;

(viii) BHP - Unanderra; and

(ix) BHP Interstate Linehaul Operation Addendum,

the provisions in clause 1.24 - Local Matters in the NSW Common Law Deed for the relevant Site;

(j) for all Employees based at a Site in New South Wales or the Australian Capital Territory:

(i) the Transport Workers classifications (but not the Transport Facility Worker classifications) in clause 1.1.2 of the NS Award;

(ii) clause 18.2 (the Distribution Facilities classifications) of the NSW DF Award; and

(k) for all Employees based at a Site in New South Wales or the Australian Capital Territory who perform work under a Transport Worker classification in the NSW Award:

(i) clauses 3.2, 6.1.2, 8.2.1, 17.2, 23.4, 28 of the NSW Award;

(ii) for Employees engaged in the removal of furniture, pianos, pianolas, refridgerators, iron safes, and similar articles, which have to be carried by Employees, an allowance of $27.80 per week; and

(iii) for Employees engaged in ordinary travelling on duty, or on work on which the Employee is unable to return home at night, an allowance of $40.25 per occasion, provided that where the Employee is travelling by a form of conveyance in which the ticket includes meals and bed, the Employee will not be entitled to this allowance.

(l) the term of the Modern Awards (including allowances), except for the following provisions (which relate to certain allowances and expenses) which are not incorporated into this Agreement:

(i) subclause 16.1(b)(ii) of the Road Transport Award, which is only not incorporated for Employees covered by the Linfox New South Wales (BOC) Agreement 2009;

(ii) subclause 16.1(b)(v) of the Road Transport Award, which is not incorporatedfor all Employees;

(iii) subclause 16.1(d) of the Road Transport Award, which is only not incorporated for Employees covered by the Linfox New South Wales (BOC) Agreement;
(iv) subclause 16.1(f)(i) of the Road Transport Award, which is only not incorporated for all Employees;
(v) subclause 16.3(a) of the Road Transport Award, which is not incorporated for all Employees; and

(vi) subclause 14.1(d) of the Road Transport Long Distance Award, which is only not incorporated for Employees covered by the Linfox New South Wales (BOC) Agreement 2009; and

(vii) subclause 14.2(a) of the Road Transport Long Distance Award, which is not incorporated for all Employees,

and subclause 12.6 of the Road Transport Long Distance Award is amended as provided in clause 36 of this Agreement for all Employees.

[7] The Union relied on a number of other clauses in the Transport Industry (State) Award (Cl 4.3.1) and cl 2.2.2 of the predecessor Agreement to the current Agreement, the Linfox New South Wales (Transport Distribution and Waste) Agreement 2007 (the ‘2007 Agreement’) and Appendix C to the Linfox/Coles/Somersby Enterprise Agreement 1994 (the ‘1994 Agreement’). Appendix C was the focus of the Union’s arguments in this case and I reproduce it below:

APPENDIX C

The purpose of this schedule is to set out payment for designated country trips.

LOCATION	KILOMETRES	TRIP RATE
Forster/Taree	470	$136.00
Port Macquarie	628	$144.18
Laurieton	658	$151.04
Tamworth	694	$159.06
Gunnedah	710	$162.49
Armidale	916	$209.41
Coffs Harbour/Toormina	943	$216.27
Narromine via Mudgee	941	$216.27

Note:

1. Unloading time of 60 minutes per store is absorbed within the trip rate - all payment inexcess of one hour at store will be paid at Award rate.

2. Future increases will be as per the quanta and dates set out in Clause 8 and as applicable as on and from 1 June, 1996.

3. All work performed prior to the start of a trip will be paid at Award rate.

4. All breakdown time will be paid at Award rate.

5. Late departures ie. in excess of 5 hours after normal start time will be granted a 10% loading. Eg. Tamworth trip rate $159.06 + $15.91.

6. All of the above trips include a $15.00 daily meal allowance.

[8] In its original dispute notification, the Union identified 24 existing and former truck drivers at the Somersby/Warnervale yards who, it was claimed, were entitled to be paid shift allowances when undertaking long distance trips. Only seven of the named employees are currently employed by Linfox. Given the extent of what is, on one view, an underpayment claim over many years for 24 drivers, the Union estimated that the total amount sought in this proceeding may be in excess of $750,000.

[9] The dispute was listed for conciliation before the Commission, but was not resolved from this process. Accordingly, directions were issued (and later amended) for the filing of evidence and an outline of the parties’ submissions.

THE EVIDENCE

[10] The following persons provided written and oral evidence in the proceeding:

For the Union

● Mr Trevor Binskin, Employee of Linfox and Union Delegate at the Somersby/Warnervale yard between 1999-2011;
● Mr Barry Carlaw, Employee of Linfox and member of the Union Consultative Committee; and
● Mr Michael Aird, Assistant State Secretary of the Transport Workers’ Union of Australia, New South Wales Branch.

For Linfox

● Mr Roger Bayley, currently employed by Linfox as Operations Director, Tesco Thailand and State Manager - Coles NSW between June 2009 and June 2012.

Mr Trevor Binskin

[11] Mr Binskin has worked as a truck driver for Linfox for 25 years; firstly out of the Somersby yard, and then after the Somersby yard was closed in 2006, out of the Warnervale yard. While his regular run was the 1:30am shift to Coffs Harbour, Mr Binskin often performed other runs for Linfox.

[12] As the Union Delegate from 1999-2011, Mr Binskin was involved in the negotiations with Linfox to establish the ‘trip rates’ system. The system was intended to set fixed amounts to be paid to the drivers when performing certain North Coast runs. He understood the system was designed to give Linfox certainty with pricing and for it to be able to judge and evaluate the cost of running its business. Mr Binskin’s own example was a run to Coffs Harbour which could vary between 12-14 hours, depending on variable factors, such as traffic, road works, accidents, etc. Setting a fixed rate for each run did not account for the actual time taken on each run, but provided Linfox with a guaranteed liability for each run.

[13] Mr Binskin explained that the ‘trip rate’ was calculated by taking into account the kilometres travelled and the average speed of the driver. While overtime was included in the rate, Mr Binskin believed that there was never any discussion about shift allowances being included in the ‘trip rate’. If shift allowances were to be included, the rate would have been much higher or four rates would have applied to each run (because of differing start times). He said it would have been ‘silly’ and against the point, to include shift allowances in the ‘trip rate’.

[14] Mr Binskin attached to his statement a copy of each of his payslips in the years 2007-2011, which demonstrated that he had been paid a shift allowance of 12.5%, irrespective of what shift he worked. Mr Binskin believed that in the Somersby/Warnervale yards, all employees had understood that shift allowances were paid in addition to the ‘trip rate’ and the 12.5% payment had never been questioned.

[15] In cross examination, Mr Binskin was shown Annexure C to the 1994 Agreement (See para 7). He agreed there was no reference to shift allowances being paid in addition to the ‘trip rates’. He believed that these terms were negotiated in 1994, when there was only one shift worked, commencing at 4:00am. Today, three shifts are worked. Nevertheless, Mr Binskin conceded that other conditions were included in Annexure C. He accepted that in 1994, shift allowances were not discussed and were not paid in addition to the ‘trip rate’. The arrangement came in later, when additional shifts were introduced.

[16] Mr Binskin conceded that his pay slips do not disclose the start or finish times of the shift or whether he was driving a distance trip or driving locally. He agreed that when he worked locally, he was paid a shift allowance when starting his shift at 1:30am.

[17] Mr Binskin agreed that the ‘trip rates’ were increased from time to time. He claimed when the three shifts were introduced around 2000, there was discussion with Linfox about shift allowances. However, he could not identify any document to this effect, except for his pay slips. He conceded that there was no document which disclosed an agreement either between himself, or the TWU and Linfox that shift allowances would be paid in addition to the ‘trip rates’. Mr Binskin’s answer to continued probing on this issue, was that he did not think Linfox would have paid shift allowances for 10-15 years, if they didn’t have to. While agreeing he was familiar with the 2011 Agreement, he could not point to where the Agreement provided an entitlement to shift allowances in addition to the ‘trip rate’. However, he believed the entitlement was possibly covered by a local arrangement.

Mr Barry Carlaw

[18] Until he was made redundant in January 2014, Mr Carlaw had worked as a driver for Linfox for 27 years. Until the closure of the Warnervale depot in 2011, he had worked from both the Somersby and Warnervale yards; both of which serviced Linfox customers on the North Coast of New South Wales. Somersby closed in 2006.

[19] Mr Carlaw was a member of the TWU Consultative Committee when, in 1994 Linfox management proposed a system of ‘trip rates’. He was a member of the negotiating committee for the new system. His evidence of the reasons for the ‘trip rate’ system and how it was calculated was the same as Mr Binskin (see paras [12]-[13] above). It was Mr Carlaw’s belief that ‘trip rates’ do not, and were never intended to take into account or compensate for shift allowances. He described how day shift drivers would be far ‘better off’ than night shift drivers under the State Award if this was the case. It would be inequitable and unfairly disadvantage different drivers in the same yard. He claimed that if shift allowances had been included in the ‘trip rates’, there would need to be four different rates on each run, depending on the time of the day the shift commenced. This would defeat the objective of greater simplicity in the payroll system.

[20] Mr Carlaw said the parties agreed to a schedule of ‘trip rates’ from the Somersby yard, codified as Appendix C to the 1994 Agreement. Mr Carlaw attached to his statement a table to explain the components of the ‘trip rates’ system in which there is no accounting for shift allowances in the rate.

[21] Mr Carlaw deposed that from 1994 to 2008, he was consistently paid shift allowances until he worked out of the Wingham yard. He was paid the early morning shift allowance of 12.5%. Copies of his payslips from 2006, 2007 and 2008 demonstrated this payment. Mr Carlaw had made calculations for the runs to Coffs Harbour and Armidale to demonstrate that drivers were not ‘better off’ under the ‘trip rates’ system compared to being paid the hourly rate.

[22] Mr Carlaw believed that, for years, no one had realised that incorrect shift allowances had been paid, until the issue was raised with management in mid 2012. He added that he understood all the drivers believed they were being paid shift allowances, in addition to ‘trip rates’. Most of them now want a claim of underpayment pursued by the Union.

[23] Mr Carlaw responded to the evidence of Mr Bayley as follows:

(a) The main reason for the ‘trip rate’ system was to regain and retain all country store deliveries by providing cost certainty.

(b) Mr Bayley’s view that the ‘trip rate’ was in lieu of all other entitlements was because he relied on the 2011 Agreement. This Agreement did not operate when the trip rate system was introduced in 1995 and the industrial instrument at the time had no such exclusion clause.

(c) He and other drivers worked between 65-80 hours a week and not 55 hours as suggested by Mr Bayley. Considerable overtime would apply to the hourly rate for most of the additional hours.

(d) He was paid hourly, rather than the ‘trip rates’ during 2008-2010 when he worked out of the Wingham yard.

(e) When the site was moved from Somersby to Warnervale, the ‘trip rate’ was decreased by Mr Bayley because of reduced distances and a reduction in travel time of 45 minutes for country trips.

(f) Drivers did not have fixed start times, but there were fixed shifts. Shifts would regularly commence 1 - 1 ½ hours before the actual shift time, in order to accommodate customers’ requirements.

(g) Drivers on afternoon shifts were paid a shift allowance of 17.5%. It was incorrect that ‘trip rates’ were confined to the early morning shifts.

(h) Linfox had a practice of paying shift allowances in addition to ‘trip rates’ at the Warnervale and Somersby yards as his attached payslips demonstrated.

[24] In cross-examination, Mr Carlaw was asked about his involvement in the 1994 negotiations over the ‘trip rates’. He insisted that shift allowances were never included in the ‘trip rate’. Nevertheless. Linfox had wanted to set a fixed rate. When shown Appendix C, Mr Carlaw agreed that there was no mention of shift allowances being paid in addition to the ‘trip rate’, despite six other entitlements being mentioned as being not included, such as meal allowances, late departures and breakdown time. Mr Carlaw said that all his pay records disclosed that shift allowances were paid in addition, as were payments for extra drops.

[25] Mr Carlaw said that while he was familiar with the 2011 Agreement, he did not think it was ‘strange’ that nowhere does it provide for shift allowances to be paid in addition to the ‘trip rates’. Despite being pressed to the contrary, Mr Carlaw insisted that certain drivers worked and were paid afternoon shift penalties of 17.5%.

[26] Mr Carlaw acknowledged that none of his tendered payslips disclose when he started his shifts, where he went that day or how long it took. It was merely a weekly total. Mr Carlaw agreed that he would be paid an hourly rate when he drove to destinations not listed in Appendix C. Mr Carlaw accepted that the calculations he had provided, do not apply to him and do not indicate start and finish times, fatigue, tea and lunch breaks.

[27] Mr Carlaw identified a number of drivers who had signed a petition supporting his claim, but who were not employed by Linfox when this dispute was lodged.

[28] Mr Carlaw said he had included reference to the State Award in his evidence to demonstrate the allowances paid on certain shifts. He was asked if the drivers had been paid the wrong shift allowances, or not paid shift allowances at all, for 20 years, why it had taken until now to make this claim? He explained it was an oversight that nobody, including Linfox (who paid them) had ‘picked up’.

[29] In re-examination, Mr Carlaw explained that shift allowances had always been paid separately because it was too complicated to pay four different shifts to any one customer.

Mr Roger Bayley

[30] Mr Bayley is currently employed by Linfox as Operations Director, Tesco Thailand. Between 2006 and 2009, as Resources and Planning Manager - Coles NSW, Mr Bayley oversaw the management of the Somersby and Warnervale yards (and Goulburn, Smeaton Grange and Eastern Creek). From June 2009 to June 2012, he was State Manager, Coles New South Wales.

[31] Mr Bayley said that when he commenced overseeing the Coles operations, Linfox had already established a ‘trip rate’ system at the Somersby site. He understood the ‘trip rate’ system was introduced to provide:

(a) financial certainty to Linfox for particular trips or runs; and

(b) a financial incentive to motivate employees to leave Somersby on time and perform the work as efficiently as possible.

[32] Mr Bayley accepted that the ‘trip rate’ system applied to most, but not all work performed by drivers at Somersby. Other work, which did not fall within the designated destinations, was paid on an hourly basis. Additional amounts were paid if the driver made extra scheduled stops on designated trips. Mr Bayley also acknowledged that some drivers may have been paid the 12.5% early morning shift penalty. However, the intention was always that the ‘trip rate’ was paid in lieu of all other entitlements under the relevant industrial instrument, so long as the drivers did not earn less than they would otherwise receive for the hours worked and overtime. This proviso acted as a safety net for employees.

[33] It was Mr Bayley’s evidence, that as the drivers at Warnervale and Somersby were paid such high salaries under the ‘trip rate’ system, there was never any concern that they would be disadvantaged compared to the Award or Agreement rates. He demonstrated this by the following schedule of calculations of payments made to Mr Binskin and Mr Carlaw:

Financial year		Hourly rate	Weekly	Average weekly income including overtime*	Average yearly income	Actual yearly earnings - Mr Binskin	Actual yearly earnings - Mr Carlaw
1/07/2006	30/06/2007	$20.60	$782.93	$1,298.02	$67,496.81	$95,802.00	$88,367.00
1/07/2007	30/06/2008	$21.43	$814.25	$1,349.94	$70,196.92	$97,336.00	$105,634.00
1/07/2008	30/06/2009	$22.28	$846.80	$1,403.91	$73,003.06	$101,068.00	$107,233.00
1/07/2009	30/06/2010	$23.18	$880.65	$1,460.03	$75,921.30	$110,730.00	$120,122.00
1/07/2010	30/06/2011	$24.10	$915.90	$1,518.47	$78,960.18	$116,584.00	$133,061.00

*(based on a 55 hour work week [10 hours at time and a half and 5 hours at double time])

[34] Mr Bayley observed that when the Somersby site closed, the same ‘trip rate’ system was implemented at Warnervale, notwithstanding that the actual kilometres travelled was less because Warnervale is further north than Somersby. This was a benefit to employees. He also noted that the ‘trip rates’ were increased each year in accordance with increases under the prevailing agreement.

[35] Mr Bayley said that all employees had fixed starting times, depending on the operational requirements of the site. He conceded that employees were paid the early morning shift allowances of 12.5% in addition to the ‘trip rates’. This only applied to employees who had a fixed starting time of 4:00am and was paid irrespective of whether they worked the ‘trip rate’ system or on an hourly basis. This was a further example of employees at Warnervale and Somersby having benefits well above the minimum entitlements. No other shift allowances were paid and there was no Linfox policy or practice of paying shift allowances in addition to ‘trip rates’.

[36] In cross examination, Mr Bayley said that he was not in a position to know how employees’ pay slips were constructed, as he had no involvement in payroll. It was the responsibility of the site operations manager to calculate overtime, ordinary hours and shift allowances. Mr Bayley was unsure if a shift allowance of 12.5% was paid for all time worked. He clarified his understanding that shift allowances were only paid on the hourly rates, not the ‘trip rates’.

[37] When Mr Bayley was shown Mr Carlaw’s pay slips, he agreed it disclosed 12.5% of $15.00 per trip for 6 trips. Mr Bayley explained that the Linfox payroll system was not set up for ‘trip rates’, which were ‘fairly unique’ to Warnervale. He believed the drivers would know the value of the trip and ‘reverse engineer’ the value into the system codes. So long as the quantum was accurate, it didn’t matter how the amount was described.

[38] Mr Bayley had no knowledge of the negotiations for the ‘trip rate’ system in 1994/1995. Obviously he did not know if there had been any discussion about the treatment of shift allowances at the time. However, Mr Bayley had facilitated the transition to Warnervale after Somersby closed. He did not believe there was any document which disclosed that the ‘trip rates’ were reduced with the changeover to Warnervale.

[39] Mr Bayley conceded that if a driver received a 12.5% loading for starting a shift at 4:00am, it was not in excess of the minimum entitlements under the Award. Mr Bayley reiterated that if the drivers were paid the hourly rate, they received 12.5% extra, but if they worked a ‘trip rate’ they only received the ‘trip rate’ amount and no shift allowances. He added that if the drivers worked an afternoon shift, they received 17.5% shift allowances on the hourly rate or the ‘trip rate’, without any shift allowances.

[40] Mr Bayley did not agree that it was inequitable for an employee working afternoon shift to receive the same ‘trip rate’ as the driver working a morning shift who was paid 12.5% plus the ‘trip rate’.

[41] When Mr Bayley referred to the ‘trip rates’ as providing financial certainty for Linfox, he meant it was about the Company retaining the work in New South Wales and not losing it to Queensland. Mr Bayley conceded that no one had actually explained the detail of how the ‘trip rates’ system worked. Mr Bayley noted that ‘trip rates’ did not apply for trips from Warnervale to Sydney or Warnervale to Newcastle.

[42] Mr Bayley was asked questions about a document known as the Common Law Deed, which applied between 2007-2011. Mr Bayley simply did not know that drivers had been paid shift allowances and ‘trip rates’ for the same trip. If they were paid both, then Linfox had made an error.

[43] Mr Bayley acknowledged that his calculation at para 33 above used a 55 hour week basis, whereas most of the drivers, including Mr Carlaw and Mr Binskin claimed they worked an 80 hour week. Mr Bayley believed that 55 hours was the average weekly hours worked for most drivers. He accepted that there would be week to week variations.

[44] In re-examination, Mr Bayley disputed drivers working 80 hours a week. Under driving restrictions, the maximum is 72 hours over 6 days, with a continuous 24 hour break on the 7th day. Therefore, it would be impermissible to work 80 hours per week.

Mr Michael Aird

[45] Mr Aird was the Union’s lead negotiator for the 2011 Agreement. It was the first comprehensive National Agreement between the Union and Linfox, covering around 150 sites and over 2500 employees. Given the scope of the Agreement, Mr Aird said it had been agreed ‘in principle’ that any underpinning arrangements, including industrial agreements and awards, would continue to apply, unless there was an agreement to vary the other arrangements. He believed the approach was that incorporated terms from agreements, New South Wales awards and the New South Wales Common Law Deed 2007 would prevail over the terms of the Agreement, to the extent of any inconsistency.

[46] It was Mr Aird’s evidence that as this was a substantial task, prone to error, it was agreed that Linfox would execute a ‘letter of comfort’ which would commit Linfox to comply with any existing arrangement, unless directly negotiated out of the agreement. To this extent, Mr Aird wrote to Mr Laurie D’Apice, Vice President, Industrial Relations and Human Resources (Linfox) on 3 March 2011 in the following terms:

‘We are pleased to advise that at [sic] State wide TWU delegates meeting held across the country yesterday endorsed the proposed Agreement. We do however confirm the endorsement was based on the following undertakings which we understand to be agreed.

1. The title of the agreement revert to the previously agreed title; ‘Linfox (Road Transport and Distribution Centres) & Transport Workers’ Union National Enterprise Agreement 2011’

2. The provisions for pool drivers at clause 30 of the agreement be adjusted at clause 30.4 to provide for a kilometre allowance for travel in excess of 25 kilometres; as opposed to the current 50 kilometres.

3. As advised the incorporated terms are not yet finalised. The parties have agreed to execute a letter of comfort confirming that enterprise agreements in place at various sites that provide provisions that are more beneficial than the common terms contained in the Agreement shall continue to apply.

4. That the kilometre rates will vary by 4% for each year of the Agreement.

5. That the company shall confirm the rates schedule by providing the applicable rates for site across Australia and variations that shall flow from the increases agreed under the terms of the Agreement. The rate schedule shall include all applicable hourly rates, all applicable kilometre rates and all applicable allowances. The rates schedule shall be forwarded to the writer and then forwarded to the various state branches in regards to the rates schedule applicable in each state.

We note that the parties have agreed to conduct a secret ballot to allow employees to exercise their democratic rights to vote on the proposed Agreement. We have attached a proposed process for the conducting of the secret ballot for your review.’

[47] Mr D’Apice replied as follows:

‘I write to you in response to your letter dated 3 March 2011. Specifically in relation to point 3 of your previous correspondence whereby you are seeking a commitment of good faith from Linfox in respect of the incorporated terms provision.

I can confirm that if in the drafting of the; Agreement between Linfox and the Transport Workers Union - Linfox Road Transport & Distribution Centres National Enterprise Agreement 2011, Linfox has inadvertently missed incorporating a term from a previous enterprise agreement which was more beneficial than the common term in place in the new enterprise agreement, Linfox will honour this arrangement.

Notwithstanding the above, any provision that was expressly excluded as a part of the negotiation and agreed to by the parties shall remain excluded, will not form part of this arrangement.

I trust this letter gives the TWU the response and assurance you are seeking in relation to this matter.’

[48] Mr Aird claimed that he only recently became aware that the local matters for the Warnervale Site from the 2007 Common Law Deed were not incorporated into the 2011 Agreement. He could not recall any discussion, during the negotiations, that the ‘trip rate’ arrangements at Warnervale would be altered. Nevertheless, he believed the ‘letter of comfort’ would remedy the oversight.

[49] Mr Aird noted that the 2007 Common Law Deed was entered into because of certain restrictions in industrial regulation imposed by the then ‘WorkChoices’ legislation. He believed it was always understood that the parties were legally bound to the Common Law Deed. Linfox had never expressed any view to the contrary.

[50] Relevantly, the 2007 Common Law Deed provided on page 40, the following terms to be applied at Coles-Warnervale:

‘COLES - WARNEVALE [sic]

1. Truck Safety checks are to be completed within ten (10) minutes.

2. Cooperation is to be given with the implementation and use of technology, with the aim to successfully achieve the Coles Myer Logistics/Linfox common fleet strategy.

3. Unloading at stores: Vehicle operators are to assist in the unloading of vehicles at stores.

4. Minor repairs and Maintenance where possible are to be performed by vehicle operators, eg. Painting of hubs, wheels and rear of trailers, changing of light globes and electrical plubs etc.

5. Vehicle operators are to wash and polish equipment as requested.

6. For relevant trips the rate as set out in Appendix C will apply in lieu of wage rates elsewhere prescribed in the agreement. Any proposed variation in trip rates due to a change to the road network or the business requirements of our customer, will be discussed and agreed with the Yard Consultative Committee.

7. Meal breaks will be taken during and in conjunction with any required RTA rest breaks taken by employees. Meal breaks hours will remain as stated in the award.

8. Breaks will also be taken during periods of delay such as waiting to dock at stores, delays loading or unloading and vehicle breakdown.

9. The Incentive Scheme Payable to all permanent employees of the Somersby Site will be cancelled as of 14/8/2003. As of Saturday 16/8/2003 Payment for hours worked not on trip rates attached in appendix C will attract Time and half for first two hours worked then Double time for all hours worked after the first two.’

[51] In cross-examination, when asked why there was only specific relevance to enterprise agreements in paragraph 3 of his letter (above) and not awards or common law deeds, Mr Aird said his understanding of the intention was to incorporate all existing customs and practices at different sites, unless the negotiations produced a different result. He suggested there was some ‘laziness’ in the drafting of the letter.

[52] Mr Aird said it was not necessary for the Agreement to have substance, it was only in relation to terms which were more beneficial. It might include local arrangements into how work was organised. The Union had not wanted to ‘reinvent the wheel’ such as pay and superannuation. There would be common conditions underpinning existing local arrangements, which may have been properly negotiated many years ago. There was not an intention to disturb such arrangements.

[53] In re-examination, Mr Aird said the intent of the words used in the letter were not a technical definition, but referred to all existing industrial arrangements.

SUBMISSIONS

For the Union

[54] In Mr Warnes’ first submission the Union claimed that the agreement to pay ‘trip rates’ together with shift allowances had been custom and practice at the Somersby/Warnervale yards since 1995. Since many drivers have been paid the incorrect level of shift allowances, this results in underpayment claims for the last 6 years.

[55] Mr Warnes asked the Commission to determine the following question:

‘Are shift allowances payable alongside the trip rate system as per Appendix C of the 1995 Agreement.’

[56] Mr Warnes relied on Cl 5 of the 1995 Agreement which stated:

‘Apart from the clauses specified in this agreement, all other clauses of the Transport Industry Interim (State) Award shall apply.’

He concluded that because Apendix C is silent on the issue of shift allowances, the terms of the Award in respect to shift allowances applies in addition to the ‘trip rate’ system.

[57] Mr Warnes said the ‘trip rate’ system was developed to allow Linfox to both manage the costs and expected costs of its runs from Somersby to its North Coast customers. Because the trips involved varied times, they sometimes extend beyond ordinary hours. This was why the Union maintained that the components to the ‘trip rate’ are normal hours and overtime hours. Appendix C has certain exclusions, but not for shift allowances which then become referable to the Award.

[58] Mr Warnes put that it was the intention of the parties when establishing the ‘trip rate’ system for it to be in addition to any shift allowances, otherwise there would be different rates for each journey. Mr Warnes also relied on the following authorities as to the context of, and purpose of the clause being relevant to interpreting industrial instruments; See: Amedroz and Sons v Transport Workers’ Union [2012] FWCFB 8951 and Short v FW Hercus Pty Ltd (1993) 40 FCR 511 (‘Short v Hercus’). Mr Warnes also relied on the conduct of Linfox in paying shift allowance on trip rates (albeit at the wrong rate) between 1994 and 2011. This clearly demonstrated the intention of the parties.

[59] In the alternative, Mr Warnes submitted that if the entitlement is not expressly stated, then usage meant that shift allowances were paid in addition to the trip rates; See: NSW Nurses’ Association v South Western Sydney Health Service [1994] NSWIRComm 147.

[60] Mr Warnes noted that the drivers’ pay slips demonstrate that shift allowances were paid on each shift. Mr Biskin, as the TWU delegate, gave evidence that any new driver to the yard had an expectation that they would be paid shift allowances. Mr Warnes also put that without the shift allowances some drivers are ‘worse off’ than being paid under the hourly rate system.

[61] In its reply submission, the Union argued that the entitlement to be paid ‘trip rates’ does not arise under Cl 26.2 of the 2011 Agreement or Cl 2.2 of the 2007 Agreement. Rather, the entitlement arises from the preserved Appendix C which operated from the Warnervale/Somersby yards from 1995 onwards. Appendix C was preserved by way of its inclusion under the NSW Common Law Deed and incorporated into the 2011 Agreement by virtue of Cl 80.2.

[62] Mr Warnes acknowledged that the Warnervale site was not named in the sites in the Common Law Deed, but the intention was to preserve all existing practices at local sites; See: Mr D’Apice’s letter of 9 March 2011.

[63] It was further argued that on a proper interpretation of Cl 26 of the 2011 Agreement, it precludes its application to the drivers at the Warnervale yard. This was because Cl 26 was intended to allow future agreements between the parties and not affect existing arrangements already in place. If Linfox had intended to apply Cl 26, there would have been a requirement for a re-negotiation of the ‘trip rate’ system. This did not occur.

[64] Mr Warnes put that it was the intention of the parties to the 2011 Agreement, as the first attempt for a National Linfox agreement, to ensure that any beneficial terms which applied at particular sites, were not lost. This was the clear and indisputable intention of the parties; See: Kucks v CSR Ltd (1996) 66 IR 182.

[65] Mr Warnes relied on the evidence of Mr Carlaw and Mr Binskin and their payslips that there was a common understanding of the parties and not just a common inadvertence; See: United Firefighters’ Union of Australia v Country Fire Authority [2007] FCA 853; Australian, Liquor, Hospitality and Miscellaneous Workers’ Union v Prestige Property Services Pty Ltd [2006] FCA 2011; Shop Distributive and Allied Employees’ Association v Woolworths Ltd [2006] FCA 616.

[66] It was said that the only evidence which demonstrated the intention of the parties was that of the Union’s witnesses and their payslips and Linfox offered no evidence to demonstrate a contrary position.

[67] In a third submission, Mr Warnes rejected Linfox’s claim that the Union had fundamentally changed its position as to the legal foundation of its claim under this application. He said the dispute is the same as on the date it was filed; that is, the drivers operating out of the Somersby/Warvervale yards on designated trips within Appendix C, are entitled to be paid the relevant shift penalties as per the applicable agreement.

[68] Mr Warnes also responded to my inquiry to the parties as to the effect, if any, of a decision of Senior Deputy President Drake in Transport Workers’ Union of Australia v LinfoxAustralia P/L [2014] FWC 1640 published on 7 March 2014.

[69] Mr Warnes put that Her Honour’s decision was entirely distinguishable as it concerned the application of the ‘trip rates’ system to two employees operating out of Wingham. Whereas in this dispute the issue is about the nature and the source of the ‘trip rate’ entitlement. In any event, Mr Warnes believed that Her Honour erred in finding that the relevant source of the ‘trip rate’ system was Cl 2.2 of the 2007 Agreement and Cl 26 of the 2011 Agreement.

[70] Mr Warnes tracked the history of the ‘trip rate’ system (see elsewhere in the decision) to demonstrate that because there was no mention of shift allowances in Appendix C, the entitlement reverts to the Award clause which would otherwise apply. Mr Warnes rejected the notion that Appendix C is intended to cover the field in terms of remuneration and other conditions. This would lead to absurd outcomes in that drivers would not receive:

(a) Rostered Days Off accrued in the time spent on trips;

(b) Annual leave accrual during trips; or

[71] Further, Mr Warnes submitted that Appendix C had been preserved in successive Agreements up to, and including the 2011 Agreement. He noted that Cl 6 of the NSW Common Law Deed 2007 states:

“For relevant trips the rate set out in Appendix C will apply in lieu of wage rates elsewhere prescribed in the agreement.” (Emphasis added)

Thus, the trip rates apply in lieu of wage rates only and not to other of the Agreement’s conditions. So even if the 1994 Agreement did not expressly provide for shift allowances to be paid on ‘trip rates’, the NSW Common Law Deed created the entitlement through Cl 6.

[72] As to the 2011 Agreement, Mr Warnes relied on the evidence of Mr Aird, that it was the clear, mutual intention of the parties, when creating the national instrument, that the existing local arrangements would continue. Mr Warnes added that the local matters in the NSW Common Law Deed pertaining to Warnervale were incorporated in the 2011 Agreement.

[73] While there may be some ambiguity, the Commission could rely on context when considering the language used for the 2011 Agreement; See: Short v F W Hercus Pty Ltd and City of Wanneroo v Holmes (1989) 30 IR 362 (‘Wanneroo’). Extrinsic material may also be called in aid of interpretation; See Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth (1998) 82 FCR 175. In this case, the ‘letter of comfort’ exchanged between Mr Aird and Mr D’Apice demonstrated that all underpinning local arrangements were to remain in place.

[74] Mr Warnes argued that the letter from Mr D’Apice was significant in that:

i. Linfox acknowledges the potential of missing a clause or term;

ii. The parties intended that more beneficial underpinning arrangements would remain in place; and

iii. Anything missed in accordance with the undertaking at [ii] by the parties in the drafting would be honoured by Linfox.

[75] Mr Warnes said that Linfox could have called Mr D’Apice to contradict the clear intention of the letter, but chose not to do so: See: Jones v Dunkel [1959] HCA 8. Moreover, there were no defects in Mr Aird’s evidence as to the true meaning of the letters.

[76] Mr Warnes conceded that while the Union relied on the terms of the 1994 Agreement, the words ‘Trip rates for country work to be performed by Linfox employees, are as determined by the rates and conditions set out in ‘Appendix C’, may be capable of more than one meaning. If this is so, then the Union’s proposed meaning should be preferred.

[77] Mr Warnes noted that only the Union had called evidence from persons actually involved in the ‘trip rates’ negotiations. Their evidence should be preferred. They were honest, candid and made admissions where appropriate.

[78] Conversely, Mr Bayley’s evidence should be afforded little weight because:

i. He was not aware of how payroll worked at Linfox, despite making contentions about how the employees a Warnervale were paid in his statement;

ii. He was entirely unaware of the content of the negotiations that took place to establish the ‘trip rate’ system;

iii. He was vague on important facts during cross-examination such as transfer of employees from Somersby to Warnervale, whereas in his statement he was categorical about it;

iv. He was confused about the change he made to paragraph 18 of his statement when questioned about it by His Honour and in cross examination. The paragraph originally made sense, and it was changed to a version that did not;

v. He had no idea during cross examination whether shift allowances were paid in addition to ‘trip rates’, despite expressing certainty of this fact in his statement;

vi. He admitted that the analysis performed by him in his statement about the income earned by Mr Carlaw and Mr Binskin was based on a guess, rather than substantive data. This is despite him drawing seemingly factual conclusions about it in his statement.

[79] As to jurisdiction, Mr Warnes highlighted the very broad language of the disputes procedure.

“22.1 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… shall be dealt with in the following manner…”

Words used include ‘any dispute’, ‘about the employment relationship’. There was no time constraint imposed as to when a dispute might arise. The Commission has unfettered power to resolve the dispute through the authority the parties gave the Commission under Cl 22 of the 2011 Agreement.

For Linfox

[80] After outlining a background to the dispute, Mr Baroni put that the Union asserts the following:

(a) that Linfox was legally obligated to pay employees, the ‘trip rates’ system at the Somersby or Warnervale site and shift allowances in addition to ‘trip rates’;

(b) that Linfox, as a result of its failure to pay shift allowances in addition to ‘trip rates’, has contravened the Linfox 2011 Agreement resulting in an underpayment of entitlements to its driver employees at the Somersby or Warnervale site; and

(c) in the alternative to (a) and (b), that employees, on the ‘trip rates’ system, at the Somersby and Warnervale site, were entitled to be paid shift allowances in addition to ‘trip rates’ as a result of past custom and practice.

[81] Mr Baroni submitted that the first question the Union required the Commission to determine ‘Are shift allowances payable alongside the Trip Rate System per ‘Appendix C’ of the 1995 Agreement?’ was beyond the jurisdiction of the Commission because of s 739(3) of the Act and Cl 22 of the Linfox Enterprise Agreement. The Commission is neither the appropriate forum nor does it have jurisdiction to resolve a dispute as to whether there has been a contravention of the Agreement.

[82] Mr Baroni said that the only Agreement to which any dispute could arise under the Dispute Resolution Procedure must be the 2011 Agreement and not any earlier agreements; namely the 1995 Agreement. The question involving the application of the 1995 Agreement is beyond jurisdiction as:

(a) it is not a question ‘about the Agreement’ (the 2011 Agreement’) and

(b) there can be no ‘employment relationship’ as the 1995 Agreement is no longer in force.

[83] Mr Baroni added that the terms of the 1995 Agreement and the 2007 Agreement are irrelevant as they have been superseded and replaced by the 2011 Agreement. Mr Baroni put that the focus of this dispute must be on the meaning of the relevant Clause in the 2011 Agreement namely;

26. TRIP RATES

26.1 Subject to approval of the appropriate Linfox manager, trip rates can be negotiated to suit the particular needs of the customers, Linfox or the task.

See: Kucks v CSR Ltd (1996) 66 IR 182; Taylor v Public Service Board (NSW) (1976) 137 CLR 208; Australian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208; Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; Bryce v Apperley (1998) 82 IR 448 and Kellogg (Aust) Pty Ltd v National Union of Workers, NSW Branch (1998) 89 IR 391.

[84] Mr Baroni said on its proper construction, Cl 26 operates so as to allow employees who have agreed to perform work under the ‘trip rates’ system to be paid a fixed rate ‘in lieu of the provisions of the Agreement’. The meaning of ‘in lieu’ is ‘instead of’ or ‘in place of’. Mr Baroni put that the terms in parenthesis are merely examples of entitlements to be interpreted in ‘trip rates’. The examples are neither exhaustive, nor do they limit the wider notion of ‘in lieu’ of the provisions of this Agreement.’ Shift work and shift allowances must be other provisions of the Agreement which are excluded.

[85] Mr Baroni said that this interpretation was consistent with the industrial content and the purpose and intent of the makers of the Agreement. An entitlement to shift allowances in addition to the ‘trip rates’ would be contrary to, and inconsistent with the purpose of ‘trip rates’.

[86] Mr Baroni said that the words of Cl 26 are unambiguous, so recourse to extrinsic material is unnecessary. Even if it had, the Union brought no cogent evidence of a contrary intention and purpose. Mr Baroni said that even if Appendix C could be a source of entitlement, it has now been superseded and replaced by the express terms of Cl 26.2 of the 2011 Agreement.

[87] Mr Baroni submitted that the method of determining whether employees were ‘worse off’ under the ‘trip rate’ system was to compare the outcomes of working under both the ‘trip rate’ system and the hourly rate provisions. Mere speculation as to whether a particular route or run resulted in a driver being ‘worse off’ is not the proper test. Safety net provisions, like in Cl 26.2, requires a broader assessment over a pay period or annually. In any event, the Union could not identify which runs or trips were said to produce ‘worse off’ outcomes.

[88] Mr Baroni rejected the notion that ‘usage’ or custom and practice at the Warnervale yard, was a sufficient basis to have the Commission recognise that shift allowances were and are paid in addition to the ‘trip rates’; See: Byrne v Australian Airlines Limited [1995] HCA 24. Mr Baroni said that the Union had failed to:

(a) identify the contractural entitlement, arising from custom and practice, that is to be, presumably implied, into each of Linfox’s employees’ contracts of employment at the Somersby or Warnervale site which would entitle those employees performing work under the ‘trip rates’ system to also be paid additional shift allowances;

(b) submit any evidence to establish a custom and practice in Linfox’s operations whereby employees, other than TWU’s witnesses, employed to perform work under ‘trip rates’ system were also paid additional shift allowances; and

(c) submit any evidence that ‘such a custom was, at any relevant time, so well known and acquiesced in that all parties of the description can reasonably be presumed thereafter to contract on the footing’ of the asserted entitlement to shift allowances in addition to payment under the ‘trip rates’ system.

[89] The mere assertions of 2 drivers as to custom and practice is not sufficient in ‘notoriety’ or an entitlement so well known, that all employees can be presumed to have a contract which provided for shift allowances to be paid in addition to ‘trip rates’. Even so, both entitlements operate with statutory force.

[90] Mr Baroni noted that while Linfox may have paid shift allowances for early morning starts, it does not follow that it had a legal obligation to do so.

[91] In Linfox’s final submission, Mr Baroni said that the fact the Union had re-characterised the dispute¸ did not alter its erroneous reliance on Appendix C. Moreover, as the Union asserts underpayment to former employees, the Commission has no jurisdiction as the employment relationship must have at least existed at the time the dispute was filed; See: Doctor Candice Shields; Doctor Kymble Spriggs v Alfred Health [2012] FWA 162 (‘Doctor Shields’).

[92] Mr Baroni responded to the decision of SDP Drake in Transport Workers Union of Australia v Linfox Australia Limited [2014] FWC 1640by firstly observing that while the dispute was different to this one, Her Honour relevantly found:

(a) for ‘trip rates’ to have applied, there had to be an arrangement which was subject to approval of the appropriate Linfox manager negotiated to suit particular needs to the customer Linfox or the task [para 21]

(b) the arrangement had to be set out in the written schedule of work pursuant to clause 26.2 of the Agreement [para 21];

(c) these requirements did not arise accidently but were specifically entered into to make an arrangement while which trip rates could be established [para 21]

[93] Even so, Mr Baroni said that given Her Honour’s comments, the Commission is entitled to find that the entitlement to ‘trip rates’ do not include an entitlement to shift allowances’.

[94] Mr Baroni dealt with the operation of the 2011 Agreement which was approved by the Commission on 9 May 2011. Appendix 5 nominates the sites to which the Agreement applies. Warnervale is one such site. Clause 80 deals with the sites covered by the Common Law Deed 2007. Warnervale is not listed as one of those sites. Accordingly, it is not permissible to interpret the Agreement as having incorporated the Common Law Deed with respect to employees at Warnervale. The only source of entitlement to ‘trip rates’ is that found at Cl 26.2 of the Agreement.

[95] Mr Baroni put that it was ludicrous for the Union to suggest that the only way to interpret Cl 26.2 was that it can only apply to future ‘trip rate’ arrangements. He noted that the corresponding clause (2.2) in the 2007 were the same as in the 2011 Agreement. Mr Baroni submitted that there was no critical analysis required to elucidate the natural and ordinary meaning of Cl 26. There was no objective history of the ‘trip rate’ system or of any employees ever performing shift work as contemplated by Cl. 51.

[96] As to the Union’s evidence, Mr Baroni submitted that in respect to Mr Aird, his evidence was not at all clear, nor was it specific to the Warnervale site. As to the exchange of letters, Mr Aird ultimately conceded that what he asked of Linfox, it had agreed; namely; an agreement as to omissions with respect to more beneficial provisions of ‘enterprise agreements’. In any event, for an exchange of letters to have any legal effect would require a variation of the Agreement.

[97] As to Mr Carlaw’s evidence, Mr Baroni said that Mr Carlaw could produce no document of any description that would suggest employees were entitled to anything other than in Appendix C. Mr Carlaw’s and Mr Binskin’s pay slips were of little value or they do not discern what work was done, where and when it was done (other than the day). Both of their evidence as to the interpretation of the Agreement was general and of no probative value. Mr Binskin could not explain why Appendix C was silent on shift allowances, yet clearly identified other entitlements.

[98] Conversley, Mr Baroni put that Mr Bayley’s evidence was clear in that there was no practice or system whereby a driver performing ‘trips’ would be entitled to a shift allowance. Mr Bayley answered questions clearly and honestly. His evidence should be preferred.

[99] Mr Baroni said that there was no adverse inference to be drawn by Linfox not calling Mr D’Apice or Mr Benton. Mr D’Apice’s correspondence made clear what Linfox’s position was and Mr Aird agreed it was as good as he was going to get from him at that point in the negotiations. Mr Baroni noted Mr Aird was called as a witness after the Union closed its case.

[100] As to Mr Benton, there is no evidence he was even involved in the historical negotiations, but only an assumption by Mr Bayley that he would have been involved.

[101] Mr Baroni concluded as follows:

i. The TWU has not been able to establish, on any view, that the employees were entitled to a ‘shift allowance’ in addition to being paid ‘trip rates’. There is no evidence.

ii. The Commission cannot conclude that Appendix “C” is incorporated into the Agreement contrary to the express provisions of the Agreement.

iii. The inordinate amount of time that has now passed without ‘shift allowance’ being paid in addition to ‘trip rates’ speaks against such an entitlement.

iv. The Commission should dismiss the dispute.

CONSIDERATION

Principles of agreement construction

[102] Both the Union and Linfox relied heavily on the principles to be applied by the Commission when interpreting the terms of an industrial instrument i.e. an enterprise agreement. I shall deal with these principles at the outset of my determination of this matter. The principles to be applied by the Commission when interpreting the terms of an industrial instrument arise from a line of well known cases some of which were referred to me be both Mr Warnes and Mr Baroni; See: Kucks v CSR Ltd (1996) 66 IR 182; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Union of Australia v Excelior Pty Ltd [2013]FCA 638; Short v FW Hercus; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 and Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 (‘Amcor’).

[103] To this long line of authority may be added the weight of two recent Full Bench decisions of this Commission. There are many others which adopt the same principles. In Lamb v Bunnings Group Limited [2013] FWCFB 2698, the Full Bench said at paragraphs 15-23:

‘There are well established principles concerning the approach to interpreting enterprise agreements. The leading High Court case is the case of Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union (Amcor). In that case Gummow, Hayne and Heydon JJ stated:

“30. Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.”

Kirby J said:

“94. However, certified agreements such as this commonly lack the precise drafting of legislation. As appears from a scrutiny of the provisions of the Agreement, it bears the common hallmarks of colloquial language and a measure of imprecision. Doubtless this is a result of the background of the drafters, the circumstances and possibly the urging of the preparation, the process of negotiation and the omission to hammer out every detail - including possibly because such an endeavour would endanger the accord necessary to consensus and certification by the Commission.

96. The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement. Approaching the interpretation of the clause in that way accords with the proper way, adopted by this Court, of interpreting industrial instruments and especially certified agreements. I agree with the following passage in the reasons of Madgwick J in Kucks v CSR Ltd, where his Honour observed:

‘It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.’” (references omitted)

Callinan J stated that there was substance in the abovementioned observations of Madgwick J in Kucks v CSR Limited (Kucks). He then said:

“131. An industrial agreement has a number of purposes, to settle disputes, to anticipate and make provision for the resolution of future disputes, to ensure fair and just treatment of both employer and employees, and generally to promote harmony in the workplace. It is with the third of these that cl 55 of the Agreement is particularly concerned. It is important to keep in mind therefore the desirability of a construction, if it is reasonably available, that will operate fairly towards both parties. …”

In Kucks, following the passage quoted above, Madgwick J went on to say:

“But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”

A leading case in relation to the interpretation of agreements is Codelfa Construction Pty Ltd v State Rail Authority of NSW. The dicta of Justice Mason, as he then was, (with whom Stephen, Aickin and Wilson JJ agreed) has frequently been adopted and applied in matters concerning the interpretation of enterprise agreements. In Codelfa His Honour said (at 352):

“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.

It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.

Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.”

It should be emphasised that in interpreting the terms of an enterprise agreement neither a court, nor this Commission, determines what is fair and just. The task involves adopting a meaning consistent with the ordinary or usual meaning of the words the parties have adopted in their agreement.

In our view clause 10.4.3 imposes an obligation on Bunnings, when it sets rosters, to have regard to the five factors specified in the clause. The language of the clause does not support any of the factors having greater or lesser priority. The obligation to have regard to a factor is a common drafting technique in legislation, awards and agreements. In R v Hunt; ex parte Sean Investments Pty Ltd Gibbs J said:

When sub-s.(7) directs the Permanent Head to "have regard to" the costs, it requires him to take those costs into account and to give weight to them as a fundamental element in making his determination.”

In our view this approach does no more than apply the ordinary meaning of the words used. We see no reason why any different approach should be adopted to the interpretation of the words in clause 10.4.3. In our view Bunnings was required to have regard to each of the factors that relevantly applied as fundamental elements in setting its roster. No factor had primacy. Operational requirements involve more than mere preferences devoid of a perceived advantage. In our view an operational requirement is something that is considered to be of benefit to the business.

We do not consider that the Commissioner applied a different approach to the one we have articulated. In our view his approach to the construction of the clause was correct.

[104] Another Full Bench in Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Ltd t/as Woolworths[2013] FWCFB 2814 said at paragraphs 12-14:

“It is undoubtedly the case that, in resolving a dispute as to the interpretation of a provision of an enterprise agreement approved under the Fair Work Act 2009, it is permissible to take into account the industrial context and purpose of the agreement. However, there are two important limitations upon this approach relevant to the determination of this appeal. The first is that the process of interpretative analysis must focus, first and foremost, upon the language of the agreement itself. For example, in Amcor Limited v CFMEU, the process was described by Gleeson CJ and McHugh J in the following terms: “The resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose ...”. Or, as Kirby J put it in the same case, “Interpretation is always a text-based activity”.A dmissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or re-write the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was. The oft-quoted statement of Madgwick J in Kucks v CSR Limited makes this clear:

The second limitation is that regard cannot be had to the respective subjective intentions and expectations of the parties as demonstrated by their “statements and actions” in negotiating the agreement. Rather, the task is to identify the common intention of the parties as they have expressed it in the terms of their agreement. In the context of commercial contracts, this task was described by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd in the following way:

“It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in

the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”

The above passage was treated as part of a “practical approach” according with the established approach to the construction of industrial agreements in Construction, Forestry, Mining and Energy Union v HWE Mining Pty Limited.

[105] Mr Warnes argues that Appendix C continues to exclusively operate notwithstanding the express provisions of Clause 26.2 of the 2011 Agreement. Even if he is right, it must be observed that Appendix C makes no reference to shift allowances being paid in addition to the ‘trip rates.’ Nevertheless, Mr Warnes also relies on Clause 4.4 of the Agreement in this respect. Clause 4.4 is in two parts:

4.4 The Terms of this Agreement operate as follows:

(a) Incorporated Terms from enterprise agreements, memoranda of understanding, common law agreements and State awards prevail, to the extent of any inconsistency, over Common Terms and Incorporated Terms from the Modern Awards;

(b) Common Terms prevail, to the extent of any inconsistency, over Incorporated Terms from the Modern Awards.

[106] It is obvious from a plain reading of the above provisions that firstly, incorporated terms from common law agreements prevail to the extent of any inconsistency over Common Terms and incorporated terms from the Modern Awards and secondly, Common Terms prevail to the extent of any inconsistency over incorporated terms from the Modern Awards, (my emphasis). It will be seen that in both parts, the inconsistency refers to the provisions of the Modern Awards, not an inconsistency with the terms of the 2011 Agreement. It may be assumed that the intention was not to create internal inconsistencies within the 2011 Agreement itself, which would be the natural consequence of Mr Warnes’ submission as to the primacy of Appendix C.

[107] In any event, it is difficult to see how Appendix C was applicable to the employees at the Warnervale site. Mr Aird acknowledged that the local matters for the Warnervale site were not incorporated into the 2011 Agreement. Whether this was by deliberate intent or an oversight is not the point, (although I will have something to say about it in my later discussion as to the merits of the matter). The fact is that even if Appendix C was the source of power in this dispute for the making of orders, Appendix C did not include the Warnervale and Somersby sites. As a matter of construction, it is not open to import words into an industrial instrument where they simply do not exist, expressly or by implication. In ResMed Limited v The Australian Manufacturing Workers' Union (AMWU)[2014] FWCFB 2418, the Full Bench said:

‘There may be cases where a statutory provision needs to be construed as if it contained additional words. However, the circumstances in which that may be done are restricted and rare. In R v Young, a decision of the NSW Court of Appeal, Spigelman CJ said:

“The proposition that a court can introduce words into an Act of Parliament offends a fundamental principle of our constitutional law. It is no part of the function of any judge to amend legislation. The task of the courts is to determine what Parliament meant by the words it used, not to determine what Parliament intended to say...

In order to construe the words actually used by Parliament, it is sometimes necessary to give them an effect as if they contained additional words. This is not, however, to introduce words into the Act. This involves the construction of the words actually used. Judicial statements which appear to have been prepared to countenance something more than this, should be so understood.

The most frequently cited formulations are:

"It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do". (Thompson v Goold & Co [1910] AC 409 at 420 per Lord Mersey)

and

"...we are not entitled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself". (Vickers,Sons & Maxim Ltd v Evans [1910] AC 444 at 445 per Lord Loreburn LC)’

[108] While this decision dealt with the principles of statutory construction, I consider it has similar application to the construction of an industrial instrument.

[109] As earlier mentioned, the express terms of Appendix C in 1994/95 make absolutely no mention of shift allowances, let alone that they were to be paid in addition to the ‘trip rates’. It is pertinent to note that there are six other conditions mentioned in respect to ‘trip rates’ (see para 4 above). In my opinion, if it was the intention of the parties who negotiated Appendix C that such an important provisio as shift allowances being paid in addition to ‘trip rates’, then surely it would have been spelt out clearly at the time and not remain dormant for 20 years until this application. In my view, it is open to conclude that the parties never intended that shift allowances should be paid in addition to the ‘trip rates’.

[110] In my judgement, the only clause which is relevant to this matter is Clause 26 of the 2011 Agreement. If this is correct, then the Union’s claims are doomed. There could be no more unequivocal or unambiguous meaning of the words in that clause. In my opinion, the express wording reflects both industrial reality and commonsense.

[111] The words of unequivocal meaning are ‘trip rates shall apply in lieu of the provisions of this Agreement (such as base rates of pay, shift penalties and overtime). It is instructive that it was Mr Binskin’s evidence that he could produce no document, of any kind, to demonstrate any agreement between the TWU, the employees and Linfox that shift penalties would be paid in addition to ‘trip rates’. In my view, no document could be produced, because no such agreement exists. In any event, the words of Cl 26 are clear and unequivocal and do not convey more than one meaning. If this is so, then reliance on extrinsic material is impermissible as a principle of construction.

[112] In addition, the original question posed by the Union to be answered by the Commission: ‘Are shift allowances payable alongside the Trip Rate System as per Appendix C of the 1995 Agreement’, must be beyond jurisdiction because firstly, the 1995 Agreement obviously no longer applies to the employees affected by this dispute. It was superseded by the 2007 Agreement, which itself was superseded by the 2011 Agreement. Secondly, it must follow that the question in respect to the 1995 Agreement is not a question ‘about the Agreement’ i.e the 2011 Agreement under Clause 22 of the Settlement of Disputes Procedure. While I acknowledge that Mr Warnes amended the question (see para 2) to overcome this difficulty, his later submissions make clear it is Appendix C of the 1995 Agreement which is relied upon.

[113] Thirdly, there must be some doubt that the dispute procedure permits a dispute between former employees and Linfox when the express provision states:

“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) shall be dealt with in the following manner…”

[114] It is difficult to construct a logical argument to defeat the unassailable propositions that this clause requires:

(a) a dispute arising ‘at the workplace’; and
(b) the dispute must be with an existing employee; and
(c) there must be an employment relationship in existence.

Here the majority of the named persons to this dispute are no longer employed by Linfox and were not employed at the time the disputes procedure was invoked; See: ING Administrators v Jajoo PR974301. In ‘Doctor Shields’, SDP Kaufman said at paras 19 - 23:

‘[19] As was the case under WR Act, the Parliament in authorising the making of enterprise agreements under the Act, limited their content to the matters referred to in section 172. Relevantly, the requirement that an enterprise agreement be about matters pertaining to the relationship between employers and employees covered by the agreement, connotes the existence of an employer/employee relationship. A person who is no longer an employee is not covered by the agreement.

[20] Section 186(6) of the Act requires that when Fair Work Australia approves an enterprise agreement it must be satisfied that the agreement includes a term that, relevantly, requires Fair Work Australia to settle disputes about any matters arising under the agreement and that allows for the representation of employees covered by the agreement for the purposes of that procedure. It follows that the matters arising under the agreement must pertain to the relationship between employer and the employee of the employer who are in dispute.

[21] It also follows that if the dispute does not pertain to the relationship between the employer and employee, then the dispute cannot concern a matter arising under the agreement.

[22] The reasoning in ING is apposite. Disputes about any matters arising under the agreement are disputes between employees covered by the agreement and their employer. A dispute that arises post the employment relationship is not such a dispute.

[23] As was the case in ING the dispute settling procedure in the Agreement requires that the dispute or grievance must first be discussed by the aggrieved doctor with the immediate supervisor of the doctor. This can only occur during the existence of the employment relationship.’

[115] Even if I am wrong about the jurisdictional hurdles faced by the Union in this case, I consider there are serious issues going to the industrial merit and credibility of the Union’s claims in this matter. It seems to me that the Union is essentially asking the Commission to endorse an arrangement that amounts to ‘double dipping’. The employees are seeking to be paid for the ‘inconvenience’ reflected by shift allowance payments, and then be paid ‘trip rates’ which expressly take into account the ‘inconvenience’ of the different start and finish times on designated trips.

[116] As mentioned earlier, the majority of the 24 named persons who signed the petition presented by Mr Carlaw, were made redundant some time ago and presumably paid redundancy payments before this dispute was even commenced. To an objective observer, it might be inferred that this dispute was a belated attempt to extract further monies from Linfox over a claim which they had never complained about and to which they were never entitled.

[117] Moreover, it is very difficult to reconcile the evidence of the Union’s witnesses that it was ‘crystal’ clear that shift allowances were paid in addition to the ‘trip rates’, with the reality that it took almost 20 years for anyone to twig that they were being underpaid or not paid any shift allowances at all. Given this reality, this evidence stretches credulity to beyond belief.

[118] Much reliance was placed by the Union on the drivers’ pay slips, dating back to 2007, identifying payments of 12.5% for shift allowances. While I apprehend that the Union saw this as it’s ‘smoking gun’, the payslips do it does not assist the Union’s case, at all, for the following reasons:

(1) It is immaterial that some, of even all of the employees, were paid an amount identified as a 12.5% shift allowance on their pay slips. It may have constituted either an over award payment or more likely a mistake made by the local management when reading the Award shift allowance clause, without having regard to the ‘trip rate’ provisions in the 2011 Agreement.

(2) In any event, I accept Mr Bayley’s explanation that the Company’s payroll system did not accommodate the distinction between ‘trip rates’ and the early morning shift allowance that was paid when the drivers commenced their shift at 4am. Mr Bayley gave undisputed evidence that the drivers would use the ‘trip rate’ payment and ‘re-engineer’ it to fit the code ‘Sh 12.5%’ on their payslips.

(3) More importantly, however, the problem with relying on the drivers’ time sheets is that they do not disclose whether the driver was working on an hourly basis (and therefore entitled to shift allowances) or working on a ‘trip rate’ basis. None of the Union’s driver witnesses could say whether their time sheets disclosed where they were working or whether they were performing work covered by the ‘trip rate’ system or working on an hourly basis.

Given this uncertainty, the timesheets were unhelpful in differentiating which system was being worked and when.

[119] Mr Carlaw’s evidence was that if shift allowances were to be included in the ‘trip rate’, there would need to be 4 different rates for each run. This does not assist the Union’s case and, in fact, supports the proposition that the objective of ‘trip rates’ was to incorporate all shift penalties for business certainty and efficiency, so long as the drivers were not ‘worse off’. Mr Carlaw also claimed drivers worked 65-80 hours week. If this is right, it would be in breach of the Safe Drivers Regulations.

[120] There was no challenge to Mr Bayley’s evidence as to the reasons why the trip rate system was introduced. Indeed, the Union’s witnesses broadly acknowledged the motivation for introducing the system. However, it seems to me, putting aside the parties’ intentions as an element in the principles of agreement construction, that the Union’s claims would have the very opposite of what was intended. Linfox would have no financial certainty for particular trips or runs if it was contingent on what time of the day the run was performed. There would be at least 4 different rates and potentially many more, if the trip or run straddled more than one shift. Secondly, there would be no incentive for drivers to perform work effectively if remuneration was based, not only on the fixed ‘trip rate’, but any variable shift penalties.

[121] Mr Warnes contended that there was a common understanding between the parties that shift allowances should be paid in addition to ‘trip rates’. Notwithstanding that there is not a single piece of documentary evidence to that effect, I cannot accept that there was a common understanding of the two payments being paid concurrently. The Union relied on the views of two of its witnesses, Mr Carlaw and Mr Binskin. Their views and their payslips are not a sufficient evidentiary foundation for such a conclusion.

[122] In addition, I do not accept that the exchange of letters between Mr Aird and Mr D’Apice demonstrates any common understanding as contended for by Mr Warnes. Even if it did, it cannot override the express intention of Cl 26.2 of the 2011 Agreement and would be entirely inconsistent with that provision.

[123] Regrettably, it is my opinion, that this dispute is a less than subtle attempt to extract a significant financial benefit from Linfox which neither flows from the wording of the 2011 Agreement or the intention of the parties. It is contrary to any sensible and commonsense approach to why the ‘trip rate’ system was introduced in the first place. The application has no industrial merit and must be dismissed.

[124] In conclusion, I remind the parties of the following paragraph (para 28) from the Full Bench’s decision in National Tertiary Education Industry Union v University of Western Sydney [2014] FWCFB 2836:

“It was contended by the NTEU that the Vice President erred in having regard to matters of cost in interpreting the relevant phrase in clause 50(24)(a). However the Vice President was entitled to have regard to the consequences of a particular construction when interpreting the Agreement. It is permissible to look to the operation of an instrument when construing it. The authorities emphasising this point in respect of industrial instruments are numerous and uncontroversial: it has been said that the words of an award “must not be interpreted in a vacuum divorced from industrial realities” and that the process of construction should be one which “contributes to a sensible industrial outcome such as should be attributed to the parties”.

[125] This application to deal with a dispute under s 739 of the Act is dismissed and the matter is concluded.

DEPUTY PRESIDENT

Appearances:

T. Warnes, Transport Workers Union, Legal Officer for the applicant.

M. Baroni, McCabes Lawyers Pty Limited, Solicitor for the respondent.

Hearing details:

2014

Sydney:

February 3.

March 7.

Final written submissions:

4 April 2014

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