Transport Workers' Union of Australia v Star Track Express Pty Ltd

[2015] FWC 3297

[2015] FWC 3297

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Transport Workers’ Union of Australia
v
Star Track Express Pty Ltd
(C2015/1987)

COMMISSIONER ROBERTS SYDNEY, 21 MAY 2015

Application to deal with a dispute - whether allocation of additional runs to contracted drivers constitutes a ‘major change’.

[1] This decision concerns an application made by the Transport Workers’ Union of Australia (the TWU or the Union) on 9 March 2015, pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute between it and Star Track Express Pty Ltd (Star Track or the Company). The dispute was referred to the Commission pursuant to clause 17 (Settlement of Disputes) of the Star Track Express Pty Limited - Transport Workers' Union Fair Work Agreement NSW/ACT 2012-2015 2012-2015 (the Agreement). Clause 17 of the Agreement sets out the steps to be followed about “any dispute or grievance that arises at the workplace between an employee and the Company about the interpretation or application of this Agreement, the Award or the NES.” Clause 17 further provides that, after a number of preliminary steps have been taken, either party may refer the dispute to the Commission for conciliation. If the dispute is not resolved in conciliation, then the Commission is empowered by the Agreement to arbitrate. The parties to the Agreement are Star Track, the TWU and those employees whose occupations are specified in the Agreement. The Agreement remains in force even though its nominal expiry date was reached on 31 March 2015.

[2] The Agreement is to be read in conjunction with the Road Transport and Distribution Award 2010 but, in the event of any inconsistency between the terms of the Agreement and the Award, the Agreement prevails to the extent of the inconsistency.

[3] Unsuccessful conciliation was conducted before me on 16 March 2015 and the case then came to me for arbitration at the request of the TWU. Directions were issued and the parties complied with those directions as to the filing and service of outlines of submissions, witness statements and other materials. The matter then proceeded to hearing in Sydney on 12 May 2015. At the hearing, the TWU was represented by Mr H Arjonilla and Star Track was represented by Mr S Woodbury of Ashurst Australia.

Background

[4] Star Track operates from a site at Minchinbury NSW where it employs some 440 drivers. A company known as TLC Express (TLC) also operates from the Minchinbury site as a contractor to Star Track and employs some 10 to 15 drivers who also conduct delivery or pick up work from Minchinbury. Star Track has used TLC on a contract basis for some years.

[5] The TWU alleges that historically only Star Track drivers have undertaken work within the Sydney Metropolitan Area, which is defined by the parties using the Hawkesbury River as a boundary. This ‘demarcation’ had some variables whereby TLC drivers operated in pockets of the Metropolitan area and more generally in the Metropolitan Area during peak periods.

[6] On 11 March 2015, after discussions with the TWU, the Company re-organised its delivery arrangements using TLC and this resulted in the re-assignment of five Star Track drivers to other routes. The Company claims that this is not a ‘major change’ as defined in the Agreement and is only a re-organisation of how work is to be performed so as to better meet the business needs of Star Track. The TWU maintains that it is a ‘major change’ and that the Company has not fulfilled its obligation pursuant to the Agreement to consult in relation to such ‘major change’.

[7] In its application, the TWU seeks a determination that “Startrack is obliged to follow the consultation provisions set out in Clause 18 - Consultation regarding a major workplace change” and a determination that “there be no change to the current arrangements for provision of work for employed and contracted drivers whilst the matter is in dispute.”

[8] Clause 18 (Consultation Regarding Major Workplace Change) of the Agreement relevantly provides at subclauses 1 and 2:

“18.1 Employer to notify

(a) Where the Company has made a decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the Company must notify the employees who may be affected by the proposed changes and their representatives, if any, including the TWU.

(b) Significant effects include termination of employment; major changes in the composition, operation or size of the company’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alterations of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this Agreement makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

18.2 Employer to discuss change

(a) The Company must discuss with the employees affected and their representatives, including the Union, the introduction of the changes referred to in clause 18.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(b) Subject to clause 18.2(c), the discussions must commence as early as practicable after a decision has been made by the Company to make the changes referred to in clause 18.1.

(c) In the event that the Company has made a decision to contract out work currently performed by its employees, the discussions must take place as soon as practicable and in any event not less than twelve weeks before the proposed contracting out of work is intended to commence.

(d) For the purposes of such discussion, the Company must provide in writing to the employees concerned and their representatives, including the Union, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the Company’s interests.”

[9] Clause 27 of the Agreement provides:

“27. WORK ORGANISATION

27.1 The Company may direct an employee to carry out such duties as are within the limits of the employee’s skill, competence and training consistent with the classification structure of this Agreement, provided that such duties are not designed to promote de-skilling.

27.2 Employees within each grade are to perform a wider range of duties including work which is incidental or peripheral to their main tasks or functions.

27.3 The Company may direct an employee to carry out such duties and use such tools and equipment as may be required, provided that the employee has been trained in the use of such tools and equipment.

27.4 The Company shall provide all gear necessary for the unloading of vehicles and the securing of loads thereon.”

Evidence

The TWU

S Moffat

[10] Mr Moffat gave sworn evidence and adopted a witness statement 1. He is a TWU member and was a Senior Delegate at the Minchinbury site.

[11] Mr Moffat said that there has been a long term agreement that company drivers would do all work in the Sydney metropolitan area and outer areas would be covered by contractors. More recently TLC started to do “a handful of deliveries in the metropolitan area”. This was agreed because it increased Star Track drivers’ productivity. About 18 months ago, Star Track started discussions with the TWU about changing the geographical boundaries for company and contractor drivers. He “always understood that it was the intention of Startrack to give some of the work given to TLC in the metropolitan zone back to us.” Four or five meetings were held between him and Mr F Sweeney (Operations Manager) and Mr S Sloan (Australian Fleet Manager) to discuss the reconfiguration of boundaries. Mr Moffat said that those discussions were aimed at returning work to company drivers rather than moving work to TLC drivers. At a meeting on 11 February 2015 he was told that the Company had decided to remove runs from company drivers and transfer those runs to TLC drivers. Affected company drivers would be directed to take certain other runs. Mr Moffat said that he left the meeting “in disbelief that such an enormous decision had been made by Startrack without honestly consulting with us.”

[12] On 19 February 2015 drivers were handed a letter telling them that the changes would occur shortly. In response to a question from one of the affected company drivers, Mr Sloane indicated that the arrangement with TLC could be extended further. Mr Moffat further said that affected drivers no longer have a permanent work pattern or area, some have lost hours and their start times are no longer guaranteed.

[13] “This is a major change for us. The Area given to TLC is an area of massive growth. By giving that area to TLC we will miss out on the inevitable opportunities that will come from it.”

[14] In cross-examination, Mr Moffat was asked: “In terms of the determination of the runs within the Sydney metropolitan area, I should say one of the factors in terms of the determination of the runs will be the volume of the pickups and deliveries?” and said “Yes.” 2

[15] Mr Moffat went on to agree that the five affected drivers have been given work within the Sydney Metropolitan region and that no driver has lost his job as a result of the increased role of TLC drivers. All five affected drivers have also retained their previous start times. Mr Moffat further agreed that the affected drivers continue to receive the same rates of pay pursuant to the Agreement but added that they have lost overtime hours.

[16] In re-examination, Mr Moffat said that there was an understanding within the yard at Minchinbury which defined the zones in which Star Track and TLC drivers would operate respectively. He went on to say that on occasion during busy periods TLC drivers would, after consultation, perform runs within the Metropolitan area.

J Benson

[17] Mr Benson gave sworn evidence and adopted a witness statement 3. He is a TWU member and the Senior Delegate at Minchinbury. He has worked for the Company for some nine years.

[18] Mr Benson said:

“For as long as I have been employed by Startrack there have been agreed areas where employee Startrack drivers work and contract drivers work. Basically, runs are classified as regional or metropolitan. Startrack drivers did the Metropolitan runs, and contractors did the regional work. In practice, work beyond the Hawkesbury River Bridge was considered regional.”

[19] Mr Benson further said that at a meeting with company representatives on 11 February 2015 he was given a plan for changes to the work to be performed by TLC. The plan presented at the meeting included giving TLC drivers metropolitan runs with a large coverage. It also included contractors starting to do ‘road pick up work’. “Another issue I was concerned about was the geographic region given to TLC. The suburbs chosen are areas of growth and are areas that would provide increased opportunities for Startrack drivers.”

[20] Mr Benson said that five drivers will be affected by the increased role of contractors and it is unclear which runs those five drivers will be transferred to. “Further, we are a seniority yard, which means that the Company cannot just dictate where those five drivers go - it requires consultation with the TWU.”

[21] “For as long I can recall, at least three of the five drivers had been working the runs that have been given to TLC drivers. This is a major change for our drivers because they are required to learn new runs, which is not as simple as it sounds.”

[22] On 19 February 2015 Mr Benson attended a further meeting with Star Track management where Mr Moffat asked whether the Company would be giving more runs to TLC drivers. The company had indicated that this might occur and this caused him some concern.

[23] “What has most surprised me about this has been the lack of consultation. This is a big change in management style. In the past a change like this would have been discussed with us at length but in this instance, management has just made the decision.”

[24] In cross-examination, Mr Benson gave evidence similar to that arising in the cross-examination of Mr Moffat. Mr Benson was not re-examined.

P West

[25] Mr West gave sworn evidence and adopted a witness statement 4. He has been employed as a driver by Star Track at the Minchinbury site for some twelve years and has been completing the Richmond/Kurrajong run for some eight years.

[26] On 2 March 2015 he attended a meeting with Mr Sloane. Mr Moffat was also present with four drivers who would be affected by the proposed change to driving runs. “This all came out of the blue, and I was angry and disappointed. I then realised that the TLC vans I had seen for sale on the side of the road were being sold as they were preparing to upgrade to trucks for our run.”

[27] “I have found this to be a very stressful uncertain and unexpected period of time. The time at which I end my shift is uncertain whereas it wasn’t before and that makes it difficult for me to co-ordinate being picked up. We have not yet been able to co-ordinate a solution.”

[28] “I am very disappointed that Startrack has suddenly given TLC suburbs that are major growth areas. This will have enormous consequences for the Drivers, as those suburbs will provide a lot of work in the future.”

[29] “I feel like I have been ambushed. I feel given my length of service and the size of the change I should have been consulted with by Startrack first. I am disappointed that Startrack have disregarded the EBA and the disputes procedure.”

[30] Mr West was not cross-examined.

P Lane

[31] Mr Lane submitted a witness statement 5 but was not required for cross-examination. He is an official of the NSW Branch of the TWU and in that role has responsibility for the Star Track site at Minchinbury.

[32] Mr Lane said that he, Mr Moffat and Mr Benson met with Star Track around December 2014 and the Company raised an issue about changes to the geographic areas where company drivers and contract drivers perform work. He went on to say that there had been a long term agreement that any runs east of the Hawkesbury River Bridge would be considered Metropolitan work and undertaken by Star Track employees and work west of that bridge would be undertaken by contractors.

[33] On 11 February 2015, together with Mr Moffat and Mr Benson, he attended a meeting with Star Track managers and was told that the Company intended to implement significant changes to the zones worked by employees and contractors respectively, in the immediate future. In effect, contractors were to be given a large portion of metropolitan work. The area to be allocated to contractor drivers “is an expanding and developing area with potential for increased work opportunities.” A further meeting did not resolve the differences between employees and the Company.

[34] Mr Lane said that on 2 March 2015 he again met with Star Track management and was told that the Company did not view the changes as ‘major’ and therefore not subject to clause 18 of the Agreement.

[35] “In my experience as a Union Official, having seen multiple changes in the workforce, I have no doubt that this is a major change because of the important repercussions of the decision on the affected drivers and the workforce in general.”

Star Track

S Sloane

[36] Mr Sloane gave sworn evidence and adopted a witness statement 6. He is Star Track’s National Fleet and Facility Manager. He was first employed by the Company as a driver. He has been based at Minchinbury since July 2014 and is responsible for safety, service and costs management of Star Track’s fleet and facility operations nationally.

[37] Mr Sloane said that TLC has performed delivery and pick up work for Star Track for several years and that the volume of freight being handled at Minchinbury is greater than can be delivered by Star Track employed drivers based at that site. This led to a decision to use TLC “in areas where it would be more cost efficient to do so.”

[38] “My understanding is that, from the time prior to my commencement as National Fleet Manager, there was an informal arrangement whereby, generally, work would only be given to TLC if the work was to the north and west of the Hawkesbury/Nepean River. However, from time to time, TLC would do work south and east of the Hawkesbury/Nepean River and Star Track drivers would also regularly undertake runs west of the Nepean River. Star Track employs approximately 440 drivers at the Minchinbury depot. Star Track currently engages approximately 10 to 15 TLC drivers as agents to conduct delivery or pick up work coming out of the Minchinbury depot.”

[39] Mr Sloane’s evidence went on to detail discussions with the TWU during January, February and March 2015. He said that the Company set out its proposed changes to the geographic area to be serviced by TLC, which effectively was an area east of the Hawkesbury River. The TWU would not agree to the Company’s proposal and claimed that it was a ‘major change’ as defined in the Agreement.

[40] As to the reason for the change in operational areas, Mr Sloane said:

“Star Track did not allocate the five runs to TLC to reduce the size of its labour force. The reason why TLC is performing work on the five runs is to alleviate pressure from the Minchinbury depot. There is currently too much volume of freight at the Minchinbury depot for the number of Star Track drivers. The five runs that have been allocated to TLC are in a geographic area that is less ‘dense’ than other geographic areas. Geographic areas with lower density involve travelling for longer distances and making fewer deliveries. It is less cost effective and efficient to allocate low density runs to star Track drivers rather than to TLC agents. If, at any time, Star Track determines that the freight can more cost effectively be performed by Star Track drivers rather than TLC, it may re-allocate the work back to Star Track drivers.”

[41] The Company implemented the change to operational areas on 11 March 2015 and each affected Star Track driver has retained his start time and has been allocated to a new run. His statement sets out the details of those new runs. “I also understand that, during the transition period when the affected drivers were learning new runs, Star Track reduced the number of tasks for each driver to assist them as they learn the new geographical area.”

[42] Mr Sloane’s witness statement continued with replies to the statements from TWU witnesses. That material is set out in some detail and I have paid regard to it. In particular, Mr Sloane rejected “the contention that the drivers have been ambushed. The discussions about this change have occurred over the last 18 months. I reject the contention that Star Track has disregarded the Enterprise Agreement and the disputes procedure. Star Track has had discussions with employees and the TWU about its view and given employees an opportunity to express their views. At the end of the process, the parties still have different views and the matter has, accordingly, been progressed via the dispute resolution procedure.”

[43] In cross-examination, Mr Sloane said that he was not aware of any arrangement or agreement that Star Track drivers would service the Sydney Metropolitan Area. However, he agreed that this occurred in practice. Mr Sloane went on to say that consultation had occurred with the union about transferring a volume of freight for delivery by TLC.

[44] In relation to the movement of five drivers to different runs, Mr Sloane was asked: “Why would it not be a major change for them?” and said: “They're employed as drivers.  They're employed to drive for Star Track.  Where they drive is irrelevant to the job that they're employed to do.” 7

Written submissions

[45] Both parties filed written outlines of submissions prior to hearing 8.

[46] The TWU argues that over a period of some 18 months, Mr Moffat and Star Track “had discussions concerning the possibility of minor changes to the division of work between Startrack drivers and non-employed (contract, agency and other) drivers.”

[47] “Historically, the TWU and Startrack have consulted and agreed that in broad terms, Sydney Metropolitan work is undertaken by Startrack Drivers. The border between the Metropolitan and Outer Areas has been the Hawkesbury River Bridge.”

[48] The submissions go on to say that, by agreement, TLC performed delivery work in ‘small pockets’ in the Metropolitan Area. However, the extent of Star Track’s decision to give a larger portion of the Sydney Metropolitan Area to TLC drivers constituted a ‘major change’ as contemplated by clause 18 of the Agreement.

[49] The submissions go on to argue that the change implemented by Star Track is a ‘major change’ for the following reasons:

“Firstly, the TWU submits that the proposed plan is a major change in the immediate operation of the Company’s workforce because it is the first instance of entire runs (as opposed to limited levels of delivery work) being undertaken by Startrack employed Drivers in the Sydney Metropolitan Region.

Secondly, the TWU submits that the decision to permit non-company drivers to operate runs in the Sydney Metropolitan Region will likely give rise to increased engagement of non Startrack Drivers in the Sydney Metropolitan Region.

The TWU submits that a profoundly significant effect of the changes is the immediate and then consequential diminution of job opportunities.

In the immediate sense, five drivers have been affected by the changes by being removed from five valued runs.

In the longer term, the area excised from the Sydney Metropolitan area will likely result in diminished job opportunities for Startrack Drivers, given that the area is considered to be an area of high growth.

The TWU submits that there has been some alteration of the times of work with Drivers uncertain as to when their shift will finish.

The TWU further submits that the likely effect of these changes will be alteration of the hours of work for some employees.

The affected Drivers have been transferred to alternative runs, in different locations.”

Star Track

[50] Star Track argues that the change instituted by it is not major within the meaning of clause 18 of the Agreement and accordingly, the pre-condition for discussions regarding a ‘major change’ does not arise. “It is not the intent of the clause to impose such an obligation in relation to every decision by the Respondent to introduce change. Such an interpretation would be inconsistent with the plain and ordinary meaning of the words used and business common sense.”

[51] “So much is evident from the use of the word ‘major’ to qualify the word ‘change’ and the insertion of a second requirement, namely, that such change be likely to have ‘significant effects on employees’. Further, the inclusive meaning of ‘Significant effects’, which repeats the words ‘major changes’ in the context of the ‘composition, operation or size of the Company’s workforce or in the skills required’, also includes the qualifier ‘Provided that where this Agreement makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.’”

[52] Star Track put forward the following points in support of its contention that it has not instituted a ‘major change’:

● No redundancy arises from the change.
● Only five out of the total of 1450 employees working under the Agreement are affected by the change.
● The five affected drivers are still employed in the same roles and operate on runs allocated by the Company.
● The affected employees retain all of their terms and conditions of employment pursuant to the Agreement.
● There has been no effect on the skills of the affected drivers as they continue to be employed as drivers.
● The affected employees have retained their usual start times and normal working hours.
● No driver has an entitlement to perform a particular run and such runs “can be changed or altered at any time for operational reasons”.
● At common law, employees must comply with lawful and reasonable directions from their employer.

[53] Both parties made supporting oral submissions.

[54] Mr Arjonilla submitted that an unwritten understanding existed between the parties which was important to the drivers “because it provided them with a sense, if nothing more, of security; sense of security that runs within that Sydney metropolitan region as valuable runs were theirs.” 9 A change which would permit outside agents to operate in an area where company drivers previously operated would constitute a significant change. The 18 months of conversations between the parties did not encompass such a change. Mr Arjonilla went on to say that “A change can still be a major change even if it does not have all of the effects that are outlined in the second component of that clause [18].”10

[55] Mr Woodbury argued that the change in work patterns was not major and merely reflected “a decision by the Company to allocate employees who are employed as drivers from one run to another. That is effectively the change that has been made.” 11 Mr Woodbury submitted that this is entirely consistent with clause 9.2 (Objectives) of the Agreement which states: “The aim of this Agreement is also to achieve maximum flexibility and efficiency in the transport functions of the Company and to encourage continuous improvement in all aspects of the services provided by the Employees.”

Conclusions and Determination

[56] In reaching my conclusions and determination, I have paid close regard to all of the evidence, written and oral submissions and the materials and documents tendered by the parties. Where I have not referred specifically to particular evidence or a particular document, it has still formed part of my consideration. This also applies to the case law cited by the parties.

[57] The change to driver runs made by Star Track from 11 March 2015 affects a total of 5 out of the 440 drivers employed at Minchinbury. The runs previously allocated to those five drivers have now moved to TLC drivers. The question before me is whether that change is a major one such as to trigger the consultation provisions in clause 18 of the Agreement.

[58] I am satisfied on the balance of probabilities that prior to 11 March 2015 there was an informal ‘demarcation’ in existence whereby runs in the Metropolitan Area were largely only allocated to Star Track drivers and TLC drivers serviced areas outside the Metropolitan area. That ‘demarcation’ never attained the status of a formal agreement or even a local understanding between the parties. Prior to 11 March Star Track had allocated work in a manner which happened to suit both itself and its drivers, nothing more.

[59] It is apparent to me on the evidence and materials in these proceedings that Star Track was entitled to vary the allocation of driver runs based on its assessment of its business needs and perceived increased business efficiency. The change took five drivers out of the comfort zone of their accustomed runs but had no other measurable substantial effect upon them. Therefore, it is not possible to characterise the change as a ‘major change’ such as to activate the terms of clause 18.

[60] Clauses 9.2 and 27 of the Agreement clearly envision the need for flexibility and efficiency in the services provided by Star Track and require employees to work as directed within the limits of their skills and competence, and provided that their duties are not de-skilling. The allocation of the five drivers to new runs is in my view comfortably within Star Track’s right to conduct its business in a manner which it believes to be the most efficient. No employee has been de-skilled in the process or otherwise suffered a detriment. The only possible area of detriment is the allegation that overtime hours may be reduced but, as such hours are not in any event guaranteed, this has not been a factor in my consideration.

[61] All in all, I determine that Star Track has consulted adequately with employees over a considerable period of time about its desire to adjust runs within delivery zones and the subsequent changes did not constitute a ‘major change’. There is no reason why the Commission should interfere in the outcome or the process.

[62] The application is dismissed.

COMMISSIONER

Appearances:

H Arjonilla for the Transport Workers’ Union of Australia.

S Woodbury for Star Track Express Pty Ltd.

Hearing details:

2015.

Sydney:

May 12.

 1   Exhibit TWU 2.

 2   Transcript PN70.

 3   Exhibit TWU 3.

 4   Exhibit TWU 4.

 5   Exhibit TWU 5.

 6   Exhibit Star Track 2.

 7   Transcript PN282.

 8   Exhibits TWU 1 and Star Track 1 respectively.

 9   Transcript PN302.

 10   Transcript PN312.

 11   Transcript PN333.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR567371>