[2021] FWC 6009

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
(C2019/5482)

COMMISSIONER CAMBRIDGE

SYDNEY, 8 OCTOBER 2021

Dispute settlement procedure - dispute about interpretation of clauses regarding custom and practice and status quo - Parties unable to settle agreed questions for determination - Commission required to formulate questions/issues for determination - characterisation of practice of payment for non-driving duties found to be an industrial rather than contractual custom and practice - no ongoing obligation to make particular payments - obligation to continue payments as status quo requirements of enterprise agreement - interpretation made providing partial support of application.

[1] This Decision is made in respect of an application that was taken under s. 739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was lodged at Sydney on 4 September 2019, and it was made by the Transport Workers’ Union of Australia (TWU). The application was taken against Linfox Australia Pty Ltd ABN:47 004 718 647 (Linfox or the employer).

[2] The application was advanced pursuant to a DSP which can be found at clause 33 of the Linfox and Transport Workers Union Road Transport and Distribution Centres Agreement 2018 (the 2018 EA). In accordance with the provisions of clause 33 of the 2018 EA, the Commission conducted an initial conciliation conference with the Parties on 13 September 2019. Further conciliation of the matter was attempted during a Report Back proceeding held on 30 September 2019. At the request of the TWU, the matter was the subject of a Mention and Directions proceeding held on 18 February 2020, at which time the Commission issued Directions to enable the matter to proceed to an Arbitration Hearing that was fixed for 1 and 2 June 2020.

[3] At the commencement of the Hearing on 1 June 2020, the Commission granted permission pursuant to s. 596 of the Act, for the Parties to be represented by lawyers or paid agents. At the request of the Parties, the Hearing was adjourned to enable further conciliation to be conducted. Following the further conciliation undertaken on 1 June 2020, the matter was listed for Report Back by telephone on 26 June 2020. Subsequently, a further conciliation conference was held on 14 July 2020.

[4] The conciliation proceedings held on 14 July 2020, did not provide for any resolution of the dispute and the matter has subsequently advanced to arbitration proceedings which were initially fixed for 28 and 29 September 2020. However, the Hearing was unable to be resumed on these days because Counsel for one of the Parties had been hospitalised. Eventually the resumed Hearing was conducted in Sydney on 12 February, 26 March, and by video link on 24 August 2021.

[5] At the Hearing, the TWU was represented by Mr P Boncardo, barrister, and Linfox was represented by Mr Y Shariff, Senior Counsel, who was instructed by Mr S Forster, solicitor from the firm of MinterEllison lawyers. Mr Boncardo introduced evidence from four individuals who were called as witnesses and cross-examined by Mr Shariff. In addition, statements from another individual were admitted into evidence without any requirement for cross-examination. Mr Shariff adduced evidence from four witnesses, all of whom were cross-examined by Mr Boncardo.

[6] During the proceeding held on 24 August 2021, Mr Boncardo and Mr Shariff both made oral submissions in elaboration of documentary material that each had filed on behalf of the respective Parties. At the conclusion of closing oral submissions, the Commission noted that the Parties had not provided agreed questions for determination. The respective advocates indicated that they would endeavour to settle agreed questions for determination, and a further period was provided to enable the Parties to engage in a process aimed at settling agreed questions for determination.

[7] On 20 September 2021, the lawyers acting on behalf of Linfox, MinterEllison, advised the Commission that the Parties had been unable to reach agreement on the proposed questions for determination. This communication included each Parties’ respective questions for determination and advised that both Parties were content for the Commission to formulate the questions for determination having regard for the respective questions and issues identified by the Parties, and the submissions made by them.

Background

[8] There was little factual contest between the Parties about the circumstances which directly gave rise to the dispute in this matter. The dispute arose from a decision taken by Linfox to stop payments that it had previously made to linehaul drivers for performing duties other than driving. The relevant linehaul drivers work from the employer’s Chullora site. These drivers had, until 25 August 2019, received payments for non-driving duties which were made on an hourly basis, and were additional to the agreed trip rates paid on a cents per kilometre basis.

[9] There was also no dispute that the payment for the non-driving duties was not prescribed by any provisions appearing directly in the 2018 EA. However, there was considerable contest regarding the circumstances which provided the historical background upon which the payments for the non-driving duties had been established. Relevantly, the non-driving duties were particularised and described as “Above Agreement Allowances (AAA)” in a letter dated 16 August 2019, from Linfox to the State Secretary of the TWU. This letter also advised that in the absence of establishing a Local Matters Agreement, Linfox intended to cease payment of the AAA on Sunday, 25 August 2019.

[10] Linfox is one of the largest privately-owned logistics companies in Australia, with more than 24,000 employees across Australia, New Zealand and Southeast Asia. The Intermodal division of Linfox includes road linehaul which essentially involves long-distance road transport operations providing for the interstate movement of goods. The Linfox Intermodal division has multiple sites in New South Wales including at Chullora, Parkes, Blaney, Tumut, Oberon and Berkley Vale. The Chullora site involves road, rail, and coastal operations and the linehaul drivers who are the subject of this dispute, are based at the Chullora site.

[11] From 2007 up until 25 August 2019, Linfox paid linehaul drivers based at the Chullora site a 130% loaded hourly rate for the performance of the non-driving duties which included: waiting time, truck washing, office tasks, pre-and post-trip inspections, restraining and un-restraining loads, trailer setting, weighing trucks and trailers, and deviations. The Chullora linehaul drivers would record the time spent on these non-driving duties on timesheets that were submitted to and paid by Linfox. The mechanism for claim and payment of hourly rates for the non-driving duties has been referred to as “EBA hours”. On occasions, Linfox management have disputed the actual EBA hours claimed by an individual driver for a particular non-driving duty. However, prior to 25 August 2019, Linfox continued to make payments in respect to the non-driving duties claimed, although at times prior to August 2019, Linfox had disputed that it had any ongoing obligation to make the payments for the non-driving duties.

[12] The payment of the non-driving duties for the Chullora linehaul drivers appeared to have its genesis in the outcome of negotiations that occurred in 2007 between Linfox and the TWU. In 2007, Linfox had commenced a process of consolidation of more than 70 separate industrial instruments that applied at its various sites throughout Australia. As part of a process that was ultimately intended to establish a single National agreement, in 2007, Linfox initially made a series of State based agreements. In New South Wales, Linfox established the Linfox New South Wales (Transport, Distribution Centres & Waste) Agreement 2007 (the 2007 Agreement) that was duly lodged with the then Workplace Authority on 22 December 2008.

[13] Around the same time that the 2007 Agreement was negotiated, Linfox and the TWU also executed an unregistered agreement which was referred to as the “NSW Common Law Deed”. Relevantly, clause 2.2 of the 2007 Agreement provided for the establishment of Trip Rates which were to apply in lieu of the Award, and the NSW Common Law Deed included at clause 1.24, a series of Local Matters. One of the Local Matters contained in the NSW Common Law Deed was titled “NSW LOCAL TRANSPORT / LINEHAUL / SANITARIUM”.

[14] The NSW LOCAL TRANSPORT / LINEHAUL / SANITARIUM Local Matters contained in the NSW Common Law Deed provided for payment of certain non-driving duties at a 130% loaded hourly rate in circumstances where particular pre-requisites such as waiting time exceeding 1 hour, had been met. Other pre-requisites mentioned in the relevant Local Matters section of the NSW Common Law Deed which activated payment for 130% loaded hourly rate, included situations where drivers were required to divert more than 30 minutes off route.

[15] In 2011, the Commission approved the Linfox Road Transport and Distribution Centres National Enterprise Agreement 2011 (2011 EA). Part C of the 2011 EA provided for site-specific terms referred to as Local Matters, to be incorporated as terms of the 2011 EA. Specifically, clause 80.2 (i) (vi) stipulated that in respect of employees covered by the NSW Common Law Deed at sites including, “NSW Local Transport/Linehaul/Sanitarium” the provisions in clause 1.24 - Local Matters, in the NSW Common Law Deed were incorporated into the 2011 EA. In addition, clause 80.4 contained in part C of the 2011 EA, specified that the terms of inter alia, the NSW Common Law Deed were to be read in conjunction with the incorporated terms of the modern awards and where there was any inconsistency, the terms of inter alia, the NSW Common Law Deed would prevail over the incorporated terms of the modern awards.

[16] The 2011 EA was replaced in 2014 when the Commission approved the Linfox and Transport Workers Union Road Transport and Distribution Centres National Enterprise Agreement 2014 (2014 EA). The 2014 EA contained terms which continued to incorporate relevant terms of the NSW Common Law Deed consistent with those found in the 2011 EA. The 2014 EA was replaced in July 2018, when the Commission approved the 2018 EA. The 2018 EA contained terms which continue to incorporate relevant terms of the NSW Common Law Deed consistent with those found in both the 2011 EA and 2014 EA.

[17] Since 2007, the non-driving duties that have been claimed by and paid to the Chullora linehaul drivers expanded beyond those duties that are mentioned in the NSW Common Law Deed. As an example, paragraph 8 of the NSW LOCAL TRANSPORT / LINEHAUL / SANITARIUM Local Matters of the NSW Common Law Deed stipulated: “Drivers will be responsible for the completion of pre trip vehicle checks…”. Despite this term being contained in the NSW Common Law Deed, EBA hours were claimed, and payments made in respect of pre and post-trip inspections which was one of the duties identified by Linfox as part of the “Above Agreement Allowances (AAA)” that it ceased payment of on 25 August 2019.

[18] In 2012, Linfox management raised the issue of the payment of EBA hours for pre and post-trip inspections at a local level and sought to stop the payments because it was not part of any written agreement between Linfox and the linehaul drivers. These attempts in 2012 to stop the payments of EBA hours for pre and post-trip inspections caused the TWU to notify the Commission of a dispute pursuant to s. 739 of the Act. Following Conference proceedings in the Commission, Linfox took no further steps at that time to stop payments of the EBA hours for pre and post-trip inspections.

[19] However, the issue of payments of EBA hours for pre and post-trip inspections was pursued further in 2015 when Linfox notified the Commission of a dispute pursuant to s. 739 of the Act. The relief sought by Linfox in the dispute notification involved a determination as to whether Linfox had “the legal and industrial right to cease the additional payment for pre and post trip inspections.” 1 Following Conference proceedings in the Commission, Linfox discontinued its dispute notification application, and it continued to make payments of EBA hours for inter alia, pre and post-trip inspections until 25 August 2019, when payments for all the non-driving duties were ceased.

[20] On 19 March 2019, Linfox again raised the issue of payment of EBA hours for pre and post-trip inspections in a letter to the State Secretary of the TWU. This letter advised, inter alia, that Linfox was proposing to cease payments of EBA hours for pre and post-trip inspections from 8 April 2019. Linfox did not cease payments of EBA hours for pre and post-trip inspections on 8 April 2019, but instead engaged in further consultation and negotiations with the TWU and inter alia, the Chullora linehaul drivers. These processes culminated when Linfox provided the letter of 16 August 2019, to the TWU State Secretary which advised that it would cease all payments in respect of the identified ‘Above Agreement Allowances (AAA)’ on 25 August 2019.

[21] Following the cessation of payments of EBA hours for all the non-driving duties identified as ‘Above Agreement Allowances (AAA)’, the TWU activated the DSP of clause 33 of the 2018 EA and subsequently on 4 September 2019, filed the application commencing these proceedings.

The TWU Case

[22] Mr Boncardo, who appeared for the TWU, made oral submissions in amplification of written outline of submission documents respectively dated 9 April 2020, 29 May 2020, 26 April 2021, and 29 June 2021. In summary, the submissions made on behalf of the TWU, asserted that there was an ongoing obligation on Linfox to make payments to the linehaul drivers in respect to the performance of the non-driving duties. Mr Boncardo submitted that the evidence established that there was a custom and practice established, upon which the obligation arose on Linfox to continue to make payments in respect of the performance of the relevant non-driving duties.

[23] Mr Boncardo submitted that the obligation for the ongoing payment for performance of the non-driving duties stemmed from two separate and distinct sources. Firstly, the payment for the non-driving duties at a 130% loaded hourly rate, became a contractual term of the contracts of employment of the linehaul drivers. Alternatively, Mr Boncardo submitted that a conventional estoppel operated to prevent Linfox from ceasing those payments.

[24] Secondly, Mr Boncardo submitted that the obligation for ongoing payment for the performance of the non-driving duties was a matter of industrial custom and practice that was recognised and preserved by clause 5 of the 2018 EA.

[25] Mr Boncardo made submissions which elaborated upon the first basis upon which it was asserted that Linfox was obliged to continue payments for the non-driving duties, namely that the established custom and practice formed a term of the contracts of employment of each of the linehaul drivers. Mr Boncardo submitted that the custom and practice of the linehaul drivers receiving payments for the non-driving duties was so well-known and acquiesced in by both the drivers and Linfox, that it could be reasonably assumed that it formed a term of the contracts between the drivers and Linfox.

[26] In support of this proposition it was submitted that the custom and practice was notorious, uniform, and certain. Mr Boncardo further submitted that there was no identified express term contrary to the practice of payment for the non-driving duties. Further, it was submitted that the practice which had existed for more than a decade, was an implied term of the employees’ contracts of employment.

[27] Mr Boncardo also made submissions which asserted that the existence of a continued contractual obligation to pay the linehaul drivers for the non-driving was established by way of a conventional estoppel. It was submitted that the estoppel arose because the Parties adopted an assumption as to the terms of their legal relationship, they conducted their relationship on the basis of the mutual assumption, each knew or intended that the other act on the basis of the assumption, and departure from the assumption would occasion detriment to one of the Parties.

[28] In summary on this point, Mr Boncardo submitted that there was a contractual obligation upon Linfox to continue to make payments to the linehaul drivers for the non-driving duties because the custom and practice of making those payments became a term of the contracts of employment of each of the linehaul drivers. Alternatively, it was submitted that Linfox was estopped from ceasing to pay the linehaul drivers for the non-driving duties.

[29] The further submissions of Mr Boncardo focused upon the second basis upon which it was asserted that Linfox was obliged to continue payments for the non-driving duties, namely that the payments represented an established industrial custom and practice. In his final oral submissions, Mr Boncardo elevated this aspect of asserted obligation for continued payments of the non-driving duties and referred to the arguments based on contract and conventional estoppel as alternatives to the proposition that a finding should be made that there was an established industrial custom and practice of the payments for the non-driving duties. The submissions made by Mr Boncardo on this point referred to clause 5 of the 2018 EA which was titled “CUSTOM AND PRACTICE” and which had been examined in previous Decisions of the Commission, and particular attention was drawn to the Full Bench Decision in the matter of Paull and Ors v Linfox Australia Pty Ltd [2018] FWCFB 1563 2.

[30] Mr Boncardo made submissions which analysed the wording of clause 5 of the 2018 EA. It was submitted that the clause sought to recognise a custom and practice which existed at the time that the agreement was made and approved, and that the unambiguous intention was for the agreement not to alter any custom and practice that existed at the time that the agreement was made. Mr Boncardo submitted that when the terms of clause 5 were read in conjunction with clause 34.4, it was clear that Linfox did not have the discretion or ability to reduce employees’ terms and conditions in respect to an existing custom and practice. Mr Boncardo said that clause 34.4 established that employees could not be worse off as a result of a local matters document being agreed to by the Parties, and it therefore followed that they certainly could not be made worse off by the unilateral decision of Linfox to cease a custom and practice.

[31] Further, according to the submissions made by Mr Boncardo, clause 5 of the 2018 EA established an intention to reduce to writing any identified custom and practice, and then it was an obligatory term for the Parties to review any custom and practice and to reflect that custom and practice by way of the processes used to establish a local agreement. It was submitted that when the provisions of clause 5 were taken in combination with clause 34.4, they operated to prevent Linfox from unilaterally altering the custom and practice of paying linehaul drivers for the non-driving duties.

[32] The final submissions made by Mr Boncardo raised the issue of the operation of the Status Quo provisions found at clause 33.4 of the 2018 EA. These submissions referred to the definition of Status Quo found at clause 9 of the 2018 EA. Mr Boncardo submitted that Linfox had acted contrary to clause 33.4 when it ceased payments for the non-driving duties before the dispute that had been raised in accordance with clause 33 had been resolved by agreement, conciliation, or arbitration.

[33] In summary, the submissions made on behalf of the TWU primarily asserted that Linfox was obliged both contractually and by way of industrial custom and practice, to continue payments to the linehaul drivers for the non-driving duties. Further, it was submitted that even if the Commission was to reject the existence of such an ongoing obligation for payments, it should nevertheless hold that the Status Quo should have been continued until the determination of these proceedings.

The Employer’s Case

[34] Mr Shariff appeared for Linfox, and he made submissions including the written submissions dated 15 May 2020 and 28 May 2021, which had been filed on behalf of the employer.

[35] The submissions made by Mr Shariff asserted that the various propositions advanced by the TWU as asserted obligations on Linfox for continuing payments for performance of the non-driving duties must fail. Mr Shariff submitted that the TWU’s claim for continued payments for the non-driving duties which was based on the arguments of contract and conventional estoppel, were misconceived, without sound basis, and inconsistent with the express written terms of the linehaul drivers’ employment contracts. Further, Mr Shariff submitted that an industrial custom and practice had not been properly established by the TWU, and even if an industrial custom and practice was established, there was nothing in the 2018 EA which prevented Linfox from discontinuing it.

[36] The submissions made by Mr Shariff provided a detailed rebuttal that the 2007 events established any basis upon which the linehaul drivers’ employment contracts were varied to incorporate terms that provided for and obliged, payments in respect to performance of the non-driving duties. These submissions asserted that the basic elements of a contract could not be established, and in particular, attention was drawn to the difference between the terms contained in the NSW Common Law Deed and the asserted obligation to continue payments of the above agreement allowances.

[37] Mr Shariff also made detailed submissions which rejected that any alleged custom and usage of the payments for the non-driving duties had become an implied term of the linehaul drivers’ employment contracts. Mr Shariff referred to the High Court Judgement in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd 3(Con-Stan) as the principal authority regarding the basis upon which custom and usage may provide basis for the implication of terms into a contract. Mr Shariff submitted that elements that the Con-Stan Judgement had identified as necessary for any custom and usage to become an implied term of a contract, could not be satisfied in the case of the payments to the linehaul drivers in respect to the non-driving duties.

[38] The submissions made by Mr Shariff asserted that the alleged custom and practice involving the payments for the non-driving duties was inconsistent with an expressed term in the drivers’ employment contracts which contained an entire agreement provision. Further, it was submitted that the payments for the non-driving duties was not so notorious or uniform that it would be assumed to be imported into the drivers’ employment contracts. Further, Mr Shariff submitted that the practice of payment for the non-driving duties was not certain and varied from driver to driver. It was also submitted that it was not reasonable for the non-driving duties to become an implied contractual term when the drivers were remunerated on a trip rate basis calculated on a cents per kilometre method which included an industry disability allowance specifically designed to compensate drivers for tasks that were ancillary to their driving duties.

[39] The further submissions of Mr Shariff rejected the proposition that the principle of conventional estoppel prevented Linfox from ceasing payments for the non-driving duties. In this regard, Mr Shariff submitted that the elements of conventional estoppel had not been established. In particular, Mr Shariff submitted that the evidence did not establish that a common assumption had been reached between Linfox and each of the linehaul drivers. Further, Mr Shariff submitted that the concept of conventional estoppel had not been established to have application in respect to the collective bargaining environment. Mr Shariff submitted that the concept of conventional estoppel was unable to apply in circumstances where representatives would be required to have reached a common assumption with an employer on behalf of other employees including future employees.

[40] Mr Shariff made further submissions which referred to what had become the primary argument upon which an obligation was asserted to have been established for the continuation of payments for the non-driving duties namely, the existence of an industrial custom and practice and its preservation, under the terms of the 2018 EA. In these submissions, it was asserted that the proper construction for the terms contained in clause 5 of the 2018 EA did not provide for a custom and practice, if established, to be imported into the 2018 EA. Further submissions made by Mr Shariff asserted that even if a custom practice was established, the terms of clause 5 or any other provisions in the 2018 EA, did not operate to prohibit or prevent the custom and practice from ceasing.

[41] Mr Shariff submitted that the evidence did not support a finding that the payments to the linehaul drivers for the non-driving duties represented an industrial custom and practice. Mr Shariff asserted that there had not been any proper identification of exactly what the custom and practice was, further it was not consistent amongst the drivers, and there was evidence that it had not been accepted by Linfox. In these circumstances, it was submitted that the payments to the linehaul drivers for the non-driving duties was not an industrial custom and practice.

[42] In further submissions, Mr Shariff contended that even if the payments to the linehaul drivers for the non-driving duties was an industrial custom and practice, there was nothing, either in the terms of the 2018 EA, or more generally, which prevented or prohibited Linfox from discontinuing the custom and practice. In support of this proposition, Mr Shariff referred to inter alia, previous attempts by Linfox to cease the payments, the inconsistency between drivers regarding the money that was claimed for non-driving duties, and he noted that the non-driving duties were already compensated by the cents per kilometre method which was the basis upon which the drivers received trip rate payments. Mr Shariff also referred to a number of Decisions of the Commission which had previously examined the operation of clause 5 of the 2018 EA and identical provisions in the 2014 EA. Mr Shariff submitted that it was clear from these Decisions that the terms of the 2018 EA did not operate to preserve any identified custom and practice.

[43] In regard to the asserted operation of the Status Quo provisions of clause 33.4 of the 2018 EA, Mr Shariff referred to the definition of Status Quo found in clause 9.1 (hh) which he said did not preserve an employee’s right to be paid for amounts to which they have no entitlement, and which had always been discretionary and non-contractual. Mr Shariff submitted that at all times since 2007, Linfox had made the payments for the non-driving duties at its discretion and the discretionary payment of allowances over and above the contractual terms were not preserved under the Status Quo provisions of the 2018 EA. Further, Mr Shariff submitted that Status Quo provisions represented a shield against prejudice arising in respect to the continuation of work and not with payments claimed for work.

[44] In summary, Mr Shariff submitted that there was no obligation upon Linfox to make payments for the non-driving duties to the Chullora linehaul drivers. Mr Shariff submitted that there was no contractual obligation nor was there any conventional estoppel which required Linfox to continue to make these payments. Further, according to the submissions of Mr Shariff, the payments for the non-driving duties did not represent an industrial custom and practice, however, if they did, there was nothing that prevented Linfox from ceasing to make those discretionary payments as it did on 25 August 2019. Mr Shariff submitted that given the broad powers that the DSP provided to the Commission for the arbitration of the dispute and/or determination of the rights and/or obligations of the Parties to the dispute, it was open to the Commission to determine the dispute by requiring the Parties to observe the terms of an open offer as set out in the document marked “MFI-1” and to direct that further negotiations occur for a local matters agreement.

Consideration

[45] The dispute in this instance has arisen from the decision of Linfox to cease payments to the Chullora based linehaul drivers for the non-driving duties. Unfortunately the Parties were unable to reach agreement upon the wording of the questions for determination of the arbitration of the dispute.

[46] A comparison of the respective questions that each side proposed has revealed significant commonality such that the primary determination has involved a requirement to provide the correct characterisation for the payments made for the non-driving duties. Fundamentally, the primary question posed was whether the payments made for the non-driving duties were a custom and practice as contemplated by the 2018 EA, and as such, represented an entitlement which Linfox did not have discretion to discontinue, or were the payments discretionary such that Linfox could discontinue the payments in whole or in part at its discretion.

[47] Similarly, each side identified, using slightly different terminology, a number of subsidiary questions that would follow from the characterisation that was provided for the payments made for the non-driving duties. There was also a clear level of consistency between the Parties in respect to a separate question regarding whether the Status Quo provisions of the 2018 EA prevented Linfox from ceasing payments for the non-driving duties as it did on 25 August 2019. A distillation of the respective propositions advanced by each of the Parties has provided for formulation of 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?

[48] The questions for determination must logically be addressed sequentially, the answer to question 1 establishes the correct characterisation that should be given to the payments for the non-driving duties, then question 2 involves the effect of that characterisation on the action of Linfox to cease payments for the non-driving duties, and question 3 further clarifies any ongoing consequences arising from the correct characterisation of the payments for the non-driving duties. Question 4 deals with the separate but related issue of the operation of the Status Quo provisions of the 2018 EA.

[49] The determination of question 1 involves an analysis of the words contained in clauses 5 and 34 of the 2018 EA so as to provide the correct construction or interpretation that is to be given to those terms. The initial task for the Commission therefore involves a contested construction determination in respect to the provisions of clauses 5 and 34 of the 2018 EA. Any determination of a contested construction question should appropriately attract, with necessary modification, the application of the principles relevant to the task of construing an enterprise agreement. Those principles, as modified, are set out at paragraph [114] of the Full Bench Decision in AMWU v Berri 4 (the Berri principles) and are in the following terms:

“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible 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 rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

Custom and Practice

[50] Consideration of the contested construction for clauses 5 and 34 of the 2018 EA has involved the application of the Berri principles and therefore, the approach commences with a consideration of the ordinary meaning of the relevant words involving what is primarily a text-based analysis. In order to undertake the approach contemplated by the Berri principles involving an initial analysis of the ordinary meaning to be given to the relevant text, it is helpful to again reproduce clauses 5 and 34 and then, having guarded against any potential rewriting of the terms to achieve what might be regarded as a fair and just outcome, identification is made of any objectively determined common intention of the Parties. This approach is assisted by examination of the terminology of the relevant subclauses having regard for the consideration that has been provided for these terms in other instances where the Commission has examined these provisions.

[51] By way of this approach, clause 5 has firstly been reproduced in full, together with the relevant terms of clause 34, and then each sub-clause of clause 5 has been examined and contextually considered having regard for the relevant text of clause 34.

[52] Clause 5 of the 2018 EA is in the following terms:

“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

[53] The relevant provisions of clause 34 are reproduced as follows:

“34. FACILITATIVE CLAUSE FOR FURTHER AGREEMENTS AND LOCAL MATTERS

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:

…

(c) New South Wales (meetings to occur in March 2018):

(i) Woolworths Wyong.

(ii) Proctor & Gamble (Erskine Park).

(iii) COTY Huntingwood.

(iv) Lion Warehouse (Erskine Park).

(v) Intermodal.

(vi) Fox Direct (Smithfield).

(vii) StarTrack (Minchinbury).

(viii) Coles: NDC (Eastern Creek); CDC (Eastern Creek); Smeaton Grange; Goulburn, (combined agreement).

(ix) Mars/Sanitarium (Berkeley Vale).

(x) Kmart (Eastern Creek).

(xi) Bunnings DC (Eastern Creek).

(xii) CUB Rosehill.

…

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.”

[54] The question of whether a custom and practice as contemplated by clause 5 of the 2018 EA, can firstly be established, and secondly, if established, whether, in the absence of a review and/or agreement to create a local agreement in accordance with subclause 5.3, it can be altered or removed, has been considered in numerous Decisions of the Commission. These Decisions have examined the relevant provisions of clauses 5 and 34 of the 2018 EA and the identical terms contained in the 2014 EA. These Decisions provide significant guidance for the determination of the proper construction to be provided for these terms, and in particular, whether in this instance, the payment to Chullora linehaul drivers for the non-driving duties should be found to represent a custom and practice for the purposes of clause 5.

[55] It is appropriate and helpful to set out, in chronological order, nine Decisions of the Commission which have dealt with the question of whether a custom and practice has been established for the purpose of any operation of clause 5 of the 2018 EA (or counterpart provisions of the 2014 EA). For convenience, each of these Decisions can be referenced by its chronological number and/or relevant summary description as set out below:

1. Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2015] FWC 2768 Roberts C 12 May 2015 - counterpart provisions of 2014 EA

(phone allowance dispute) - laundry allowance paid in error therefore entitled to cease payment - phone allowance a quintessential instance of a local custom and practice.

2. Linfox Australia Pty Ltd v Transport Workers’ Union of Australia [2015] FWC 8325 Roberts C 4 December 2015 - counterpart provisions of 2014 EA

(APMs Dispute) Alternative Payments Methods contained in expired agreements not incorporated or otherwise subsumed into 2014 EA. The fact that Linfox continued to apply the two APMs beyond their expiry dates does not act to extend their operation…

3. Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2016] FWC 908 Roberts C 10 February 2016 - counterpart provisions of 2014 EA

(public holiday dispute) - not an error or misinterpretation of the Agreement/Award – Linfox not entitled to vary the custom and practice arrangements.

4. Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2016] FWCFB 443 Catanzariti VP Sams DP and Bull DP 12 February 2016 - 2014 EA

(APMs Dispute Appeal) application of Con-Stan principles. Contrary provision clause 45.2 - “the AMPs [sic] were not a “custom and practice” and did not form part of the 2014 Agreement.”

5. National Union of Workers v Linfox Australia Pty Ltd [2016] FWC 3039 Gregory C 1 June 2016 - counterpart provisions of 2014 EA

(Truganina DC picking dispute) Con-Stan principles applied - no custom and practice established.

6. Alan Paull & Ors v Linfox Australia Pty Ltd T/A Linfox [2017] FWC 5751 Gregory C 3 November 2017 - counterpart provisions of 2014 EA

(Truganina DC picking dispute revisited) Con-Stan principles applied in more depth - no custom and practice established.

7. Mr Alan Paull and Ors v Linfox Australia Pty Ltd [2018] FWCFB 1563 Gostencnik DP Coleman DP and Bissett C. 16 March 2018 - 2014 EA

(Truganina DC picking dispute revisited appeal) - industrial rather than contractual custom and practice can be established without reference to Con-Stan principles.

8. Paul Alan and Chau, Alex and others v Linfox Australia Pty Ltd T/A Linfox Australia [2019] FWC 7345 Lee C 2 December 2019 - 2018 EA

(Truganina DC picking dispute reconstructed) - No industrial custom and practice found to exist.

9. Alan Paull & Ors v Linfox Australia Pty Ltd T/A Linfox Australia [2020] FWCFB 1553 Hatcher VP Booth DP and Anderson DP. 23 March 2020 - 2018 EA

(Truganina DC picking dispute reconstructed appeal) - the case advanced on behalf of the employees before the Commissioner was hopeless - the alleged custom and practice was neither notorious nor ever acknowledged by Linfox - other provisions pointing to the requirement for a flexible workforce, the removal of restrictive work practices and compliance with lawful and reasonable directions.

[56] The construction that should be provided for the terminology “custom and practice” found in clause 5 of the 2018 EA, has been assisted by a reading of the consideration found in the nine Decisions set out above. A careful examination of these Decisions has provided some important clarification for the distinction that can be made in respect to an industrial custom and practice vis a vis a contractual custom and practice. In this case, the TWU argued that the payment to Chullora linehaul drivers for the non-driving duties (aka ‘Above Agreement Allowances (AAA)’) was a contractual custom and practice or alternatively it was an industrial custom and practice. As a further alternative, the TWU asserted that the principles of conventional estoppel prevented Linfox from ceasing the payments to Chullora linehaul drivers for the non-driving duties.

[57] There is clearly a more stringent test that must be met to establish a contractual as opposed to industrial custom and practice. The elements that must exist in order to establish that a custom and practice has become a contractual term imported into the contract between the Parties, are those identified by the High Court Judgment in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (Con-Stan) which can be summarised as reproduced as follows:

“(1) The existence of a custom or usage that will justify the implication of a term into a contract is a question of fact.

(2) There must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract.

The custom must be so notorious that everybody in the trade enters into a contract with that usage as an implied term. It must be uniform as well as reasonable, and it must have quite as much certainty as the written contract itself.

However, it is not necessary that the custom be universally accepted, for such a requirement would always be defeated by the denial by one litigant of the very matter that the other party seeks to prove in the proceedings.

(3) A term will not be implied into a contract on the basis of custom where it is contrary to the express terms of the agreement, and

(4) A person may be bound by a custom notwithstanding the fact that he had no knowledge of it.”

[58] The evidence in this instance established that the payments to Chullora linehaul drivers for the non-driving duties was well known and acquiesced in by the drivers and Linfox over a significant period of time. Further, the payments for the non-driving duties was notorious, and available to and paid to all drivers performing the Chullora linehaul trips. However, the 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.

[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.

[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.

[64] The payments to Chullora linehaul drivers for the non-driving duties (aka ‘Above Agreement Allowances (AAA)’), was an industrial custom and practice as comprehended by the terms “custom and practice” used in clause 5 of the 2018 EA as the evidence has met the ‘threshold’ necessary to satisfy the proper meaning to be given to those terms, as was held by the Full Bench in the Decision identified as number 7 above. The following extracts from that Decision are relevant:

“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’.” 5

and

“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.” 6

[65] Consequently, the payments to Chullora linehaul drivers for the non-driving duties has not satisfied all of the Con-Stan elements and therefore these payments were not imported as implied terms in the drivers’ contracts of employment, and they cannot be characterised as a contractual custom and practice. However, when the evidence of the negotiated origins, subsequent expansions, substance, notoriety, documentary recognition, challenges, and subsequent continuation of the payments for the non-driving duties over an extensive period of time, is properly evaluated, the correct characterisation to be provided for the payments satisfies that they were an industrial custom and practice as contemplated by clause 5 of the 2018 EA.

[66] Turning next to the question of whether the concept of conventional estoppel operated to prevent Linfox from ceasing payments for the non-driving duties, was a matter that raised argument as to whether there was a jurisdictional foundation for the Commission to apply such a legal principle where the terms of the contract extended beyond the individual Parties and included the terms of the 2018 EA. In any event, 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.

Unilateral Alteration to a Custom and Practice

[67] Having established that the payments to the Chullora linehaul drivers for the performance of the non-driving duties as particularised at [29.1] to the applicant’s closing submissions of 26 April 2021, was an industrial custom and practice for the purposes of clause 5 of the 2018 EA, it is next necessary to determine whether Linfox was prevented from ceasing those payments. The terms of subclauses 5.1, 5.2 and 5.3 need to be carefully examined and considered both in the context of the broader terms of the 2018 EA and having cognisance of the guidance provided by the nine previous Decisions that have been earlier identified.

[68] The wording of subclause 5.1 refers to “This Agreement” not altering a custom and practice. The operative basis for these words was identified by the Full Bench in Decision number 7 wherein it was stated: “First, clause 5.1 states that ‘this Agreement is not intended to, nor shall it, alter a custom and practice applicable to the parties.’ It would be necessary to ascertain precisely which clause or clauses in the Agreement were said to alter the alleged custom and practice.” 7 In this case it was not any term in the 2018 EA which operated to alter the custom and practice of payments to the Chullora linehaul drivers for the non-driving duties (aka ‘Above Agreement Allowances (AAA)’), it was the unilateral decision taken by Linfox.

[69] Consequently, although subclause 5.1 did not prevent Linfox as opposed to some other term in the 2018 EA, from altering the custom and practice, it is necessary to consider whether any of the other terms of clauses 5 and 34 operate to preserve the custom and practice and prohibit Linfox from ceasing the payments for the non-driving duties.

[70] The TWU asserted that the terms of clauses 5 and 34 when read together, preserved a custom and practice notwithstanding that no review was conducted in accordance with subclauses 5.3 and 34.3, and no local agreement could be reached to reflect the custom and practice. In support of this preservation proposition, the TWU emphasised the words contained in subclause 34.4 which was titled “Employees to Be No Worse Off”. It was submitted that if a local matters review, or a new local matters agreement, or a variation to an existing local matters agreement, involved a requirement on Linfox to ensure that no employee was worse off, it was incongruous to allow the Chullora linehaul drivers to be worse off as a result of the unilateral decision of Linfox.

[71] There is a fundamental irrationality to the preservation proposition that was advanced by the TWU. If the terms of clauses 5 and 34 operated so that if agreement on a new or varied local matters agreement could not be reached, the custom and practice must continue unchanged, then there would be little or no reason for the employees to reach any agreement at all. If the preservation of a custom and practice was the outcome of any refusal to agree, the employees would simply have no reason to agree, and the processes envisaged by clauses 5 and 34 would be neutered.

[72] The impasse created when a local matters agreement cannot be reached in respect to a custom and practice is overcome through subclause 5.4 which states; “Any dispute about the operation of this clause is to be dealt with in accordance with the disputes procedure in this Agreement”. Therefore, in the absence of any agreement to establish (or vary) a local matters agreement which deals with a custom and practice, the DSP provides for the eventual resolution of that impasse by arbitrated determination of the Commission.

[73] A contextual consideration of the entire gamut of provisions contained in the 2018 EA which deal with custom and practice and local matters agreements, demonstrates that the unambiguous intention of these terms was to engage in processes which led to clarification of agreed terms that were embodied in local matters agreements. There was a clear intention that engagement in these processes was not to lead to an employee becoming worse off. However, these provisions cannot be extrapolated to mean that if the processes for reaching agreement fail, then no change can occur.

[74] Although the circumstances were materially different, the Full Bench in Decision identified as number 7 above also dealt with the concept of the asserted preservation of a custom and practice when it stated:

“As noted in Berri, there are no parties to enterprise agreements, and analogies with contract law should be approached with caution. But in respect of those who made the Agreement under s.182 of the FW Act, it is relevant to consider whether they really intended clause 5.1 to preserve the type of practice (or rather non-practice) that is said by the appellants to exist here, given the other provision to which we have referred above. We think this is unlikely.” 8

[75] Consequently, clauses 5 and 34 of the 2018 EA do not prevent the unilateral alteration of a custom and practice in circumstances where the processes envisaged by those clauses have not culminated in an agreed position being reached. In this instance, Linfox had made repeated attempts to reach an agreed position for alteration of the custom and practice of payments for the non-driving duties. The protracted unsuccessful negotiations combined with a deterioration in the financial performance of the Intermodal division and successful concessionary outcomes at other sites, ultimately acted as impetus for the decision to cease all payments to the Chullora linehaul drivers for the non-driving duties. Subject to any ongoing obligations arising from the expressed terms of the 2018 EA and the potential operation of the Status Quo provisions, Linfox was not prevented from ceasing the custom and practice of payments to the Chullora linehaul drivers for the non-driving duties in circumstances where no agreement could be reached to reflect the custom and practice, or some permutation of it, in a local matters agreement.

[76] Finally, in respect to the application of other aspects of the Berri Principles, the construction that has emerged from the identification of the objective common intention of the Parties does not lead to an interpretation made by way of an overly technical approach. Indeed, the outcome could be described as an approach that involved fundamental fairness and industrial common sense. Further, the other aspects identified in the Berri principles have, to the extent that they are applicable, provided further support for the contested construction question to be resolved in accordance with the objective common intention of the Parties that has been identified, particularly in respect to the combined operation of clauses 5 and 34 of the 2018 EA.

Ongoing Obligations for Particular Payments

[77] The payments to the Chullora linehaul drivers for the non-driving duties has been established to be an industrial custom and practice for the purposes of clause 5 of the 2018 EA. Further, the terms of the 2018 EA did not prevent Linfox from altering that custom and practice in circumstances where no agreement could be reached to reflect the custom and practice in a local matters agreement. However, particular payments which were included in the non-driving duties could not be ceased as they represent terms of the 2018 EA for which Linfox is obliged to continue payments.

[78] There is an ongoing obligation on Linfox to make payments for certain non-driving duties that have been incorporated as terms of the 2018 EA under Part L. Clause 88. 2 (k) of Part L of the 2018 EA incorporates the provisions of clause 1.24 - Local Matters contained in the NSW Common Law Deed, the relevant terms of which are reproduced as follows:

“NSW LOCAL TRANSPORT / LINEHAUL / SANITARIUM

In accordance with the appropriate subclause in the 2007 Agreement between Linfox and the Transport Workers Union of Australia, and subject to there being no inconsistency with the other terms of that agreement, the following matters are agreed at a local level between the parties:

…

5. Where required, employees will perform extraneous duties within their competence.

…

7. Where required by Linfox, an employee may be directed to start from a location other than the Linfox specified depot including customer sites. Any directions to start from such location shall be reasonable, having due regard to the distance an employee is required to travel from their residence to commence work. For linehaul drivers, time spent at such location shall not constitute pick up and delivery duties and shall not be counted as loading/unloading time unless the conditions of the definitions of pick up, delivery, loading/unloading are met. (These definitions are included at the end of this document for clarification)

8. 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. …

…

Specific Linehaul matters

1. Waiting time will be paid after one (1) hour delay at changeover point and will be calculated to the nearest 15 minute increment. The rate payable will be the standard hourly rate for a permanent or casual employee plus a 30% disability allowance as outlined in the Long Distance Rate Schedule. Every effort will be made by the Company to investigate and implement mutual changeover times to streamline the process and reduce delays. Long-distance drivers should:

a) Notify their appropriate Supervisor of the delay, depending on time of day.

b) Carry an overnight bag in the event that these delays cannot be avoided, and

c) Be ready to drive through (continue the journey) where a changeover cannot be undertaken.

2. Where working hours allow and when necessary, linehaul drivers may be required to pick up or drop off their trailers to an alternate location, other than their home starting point. No payment will be made for this unless the location requires the driver to divert more than 30 minutes off route, or the activity of dropping off/picking up takes more than half an hour. Should this occur, a payment of one (1) hour will be paid at the base rate plus 30% as outlined in the Long Distance Rate Schedule.

…

Definitions

Pick up - A pick up is defined as the action of travelling to a site with a prime mover and physically hooking up trailer/s to a prime mover and carrying out pre-trip inspection in preparation for a linehaul trip. This is regarded as part of the journey and will only attract any extra payment if the conditions of Clause 2 under Specific Linehaul Matters above is met.

Drop off - A drop off is defined as the action of travelling to a site with a set of trailers and physically unhooking the trailer/s on that site, then picking up other trailers or leaving bob-tail. This is regarded as part of the journey and will only attract any extra payment if the conditions of Clause 2 under Specific Linehaul Matters above is met.

Loading - Loading is defined as the action of arriving at a site with a set of trailers and overseeing and assisting the actual loading of the trailers. This will include, but not be limited to, such activities as opening curtains, moving gates and restraining the load. The rate payable will be equal to the hourly rate for loading/unloading as defined in the Long Distance Rate Schedule.

Unloading - Unloading is defined as the action of arriving at a site with a set of trailers and overseeing and assisting the actual unloading of the trailer/s. This will include, but not be limited to, such activities as opening curtains, moving gates and restraining the load. The rate payable will be equal to the hourly rate for loading/unloading as defined in the Long Distance Rate Schedule.

*Please note - there will be no “double – dipping” of pick up/loading payment or drop off/unloading payment.”

[79] Consequently, payment 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, could not be ceased as part of the decision taken by Linfox to cease payments for the non-driving duties on and from 25 August 2019. Further, there is an ongoing obligation on Linfox to make payments as prescribed by clause 1.24 of the Local Matters contained in the NSW Common Law Deed.

Status Quo

[80] The fourth and final question for determination in this instance concerns the operation of the Status Quo provisions of the 2018 EA. Relevantly, the DSP includes subclause 33.4 which is the operative term that activates a Status Quo for a matter in dispute, and a definition for Status Quo is found at clause 9.1 (hh). Subclauses 33.4 and 9.1 (hh) are reproduced as follows:

“33.4 Until the matter is resolved by agreement, conciliation or arbitration, the Status Quo shall prevail. No party is to be prejudiced as to the final settlement by the continuance of work in accordance with this procedure.

(hh) Status Quo means the arrangements in place prior to the proposed or implemented change/s that have caused the dispute. This includes the performance, operation and management of all work and rates of pay and allowances.”

[81] A straightforward reading of the Status Quo provisions of the 2018 EA would mean that the decision to cease payments for the non-driving duties on and from 25 August 2019, would be captured by the requirements to continue the arrangements that provided those payments once the matter had been activated as a dispute under clause 33. These provisions require that once the cessation of the payments for the non-driving duties had become a matter in dispute, Linfox was required to revert to the prior arrangements and continue the payments until the matter was resolved by agreement, conciliation, or arbitration.

[82] It is relevant to recognise the regrettably inconsistent position that was adopted by Linfox in respect to the operation of the Status Quo provisions contained in the 2018 EA and the counterpart terms in the 2014 EA. In 2015, when Linfox notified the Commission of a dispute about whether it had “the legal and industrial right to cease the additional payment for pre and post trip inspections” it also provided the following advice to the Commission:

“4. On 5 August 2015 management met with the TWU to discuss this and a range of other issues. Management advised the TWU of its intention to discontinue payment for pre-and post trip inspections.

5. The TWU advised management that the intention to discontinue payment for pre and post trip inspections is in dispute and sought confirmation that Linfox would maintain the status quo until such time as the disputes procedure had been completed.

6. Linfox gave the undertaking to maintain the status quo until the dispute is resolved.” 9

[83] Linfox’s current General Manager Workplace Relations, Mr Jones, was questioned as to why Linfox considered that it was not bound to apply the Status Quo when it ceased the payments for the non-driving duties in August 2019, yet, when in 2015, it foreshadowed ceasing two particular payments for non-driving duties, namely, the pre and post trip inspections, it gave an undertaking to maintain the Status Quo until the dispute was resolved. The answers provided by Mr Jones on this question were unconvincing and unsatisfactory.

[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.

Conclusion

[85] In this case the Commission has been required to determine a contested construction question regarding the terms contained in clauses 5 and 34 of the 2018 EA. Specifically, in the absence of an agreed position of the Parties, the Commission has been required to formulate four questions for determination. The first question required a determination of whether the practice of payments to Chullora linehaul drivers for the non-driving duties could be correctly characterised as a custom and practice as construed by those terms contained in clause 5 of the 2018 EA. There were three potential answers to this question. The payments for the non-driving duties could be either, a contractual custom and practice, or they could be an industrial custom and practice, or they could be found to not be a custom and practice at all.

[86] In respect to this first and primary question, having regard for all of the evidence that was presented, and by application of the principles relevant to the task of construing contested terms such as those under examination in this instance, the Commission has determined that the payments to Chullora linehaul drivers for the non-driving duties is an industrial custom and practice.

[87] The second question for determination follows from the outcome of the first question and having established that the payments to Chullora linehaul drivers for the non-driving duties is an industrial custom and practice, it has been necessary to determine whether Linfox was prevented from ceasing those payments as it did on 25 August 2019. A careful consideration of the terms of clauses 5 and 34 in the context of the 2018 EA as a whole, and having regard for previous Decisions of the Commission that have considered these and earlier counterpart terms, has resulted in a determination that in the particular circumstances of this case, Linfox was not prevented from ceasing the industrial custom and practice of payments to Chullora linehaul drivers for the non-driving duties save and except for those specific payments for which there is an ongoing obligation on Linfox to make payments as prescribed by clause 1.24 of the Local Matters contained in the NSW Common Law Deed which is an incorporated term of the 2018 EA.

[88] The answer to the third question was provided as part of the answer to the second question, as the excluded components that Linfox could not cease payment of, because they represent ongoing obligations to continue to make payments as prescribed by clause 1.24 of the Local Matters contained in the NSW Common Law Deed which is an incorporated term of the 2018 EA. The ongoing obligations are confined to payments 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.

[89] Finally, although Linfox was not prevented from ceasing the payments for the non-driving duties because they represented an industrial custom and practice, it nevertheless was prevented from ceasing those payments by virtue of the operation of the Status Quo provisions of clause 33.4 of the 2018 EA. The requirement to maintain the Status Quo and continue all of the payments is extinguished at the date of this Decision.

[90] In summary, the dispute in this instance has been resolved by answering the four questions for determination as follows:

1. The payments to Chullora linehaul drivers for the non-driving duties as particularised at [29.1] to the applicant’s closing submissions of 26 April 2021, represented an industrial custom and practice in accordance with clauses 5 and 34 of the Linfox and Transport Workers Union Road Transport and Distribution Centres Agreement 2018 (the 2018 EA).

2. 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.

3. There is an ongoing obligation on Linfox to continue the payments only in respect to those non-driving duties prescribed by clause 1.24 of the Local Matters contained in the NSW Common Law Deed which is an incorporated term of the 2018 EA.

4. Linfox was 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.

[91] The effect of these determinations will mean that Linfox will be obliged to make payments to Chullora linehaul drivers for all non-driving duties as particularised at [29.1] to the applicant’s closing submissions of 26 April 2021, from 25 August 2019 to the date of this Decision. Further, from the date of this Decision, Linfox has ongoing obligations to make payments to Chullora linehaul drivers only in respect to those non-driving duties prescribed by clause 1.24 of the Local Matters contained in the NSW Common Law Deed which is an incorporated term of the 2018 EA.

[92] In the event that the Parties require Orders to reflect these determinations any request for such Orders should be made within 21 days from the date of this Decision and any such request should include draft proposed Orders.

COMMISSIONER

Appearances:

Mr P Boncardo, Counsel appeared for the Transport Workers’ Union of Australia.

Mr Y Shariff, Senior Counsel, with Mr S Forster, solicitor from MinterEllison appeared for the employer.

Hearing details:

2020.
Sydney:
June, 1.

2021.
Sydney:
February, 12
March, 26
August, 24 (video hearing).

Printed by authority of the Commonwealth Government Printer

1 Exhibit 13 – ‘DJ-05’.

2 Mr Alan Paull and Ors v Linfox Australia Pty Ltd [2018] FWCFB 1563, Gostencnik DP, Coleman DP and Bissett C.

3 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14, 160 CLR 226, 64 ALR 481.

4 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005, Ross P, Gooley DP and Hunt C.

5 Mr Alan Paull and Ors v Linfox Australia Pty Ltd [2018] FWCFB 1563 Gostencnik DP Coleman DP and Bissett C. 16 March 2018 @ paragraph 34.

6 Ibid @ paragraph 35.

7 Ibid @ paragraph 37.

8 Ibid @ paragraph 40.

9 Exhibit 13 – ‘DJ-05’.

Transport Workers' Union of Australia v Linfox Australia Pty Ltd