Transport Workers' Union of Australia v Toll Holdings Ltd

Case •

[2025] FWC 80

•

10 JANUARY 2025
[2025] FWC 80

FAIR WORK COMMISSION
DECISION

Fair Work Act 2009

s.739—Dispute resolution

Transport Workers’ Union of Australia
v

Toll Holdings Ltd

(C2024/1093)

DEPUTY PRESIDENT COLMAN

MELBOURNE, 10 JANUARY 2025

Dispute arising under an enterprise agreement – whether redundancy occurred – whether employer decided that positions not required – whether employees terminated by conduct of the employer – whether duty to provide work – whether consultation obligations met

  1. The Transport Workers’ Union of Australia (TWU) has made an application under s 739 of the Fair Work Act 2009 (FW Act) and the dispute resolution procedure in clause 15 of the Toll – TWU Enterprise Agreement 2023-2026 (Agreement) by which it asks the Commission to arbitrate a dispute between the union and Toll Holdings Ltd (Toll). The dispute concerns whether, as the TWU contends, a ‘redundancy’ occurred within the meaning of clause 26(a) of the Agreement in respect of the positions of 25 drivers (Relevant Employees) following the end of a major service contract between Toll and Coles in February 2024. Clause 26(a) states that a redundancy occurs where Toll ‘decides that it no longer requires the position’ of an employee, and that decision ‘leads to the termination’ of the employee’s employment.

  1. The Relevant Employees were employed by Toll pursuant to contracts of employment that identified their positions as grade 6 drivers. In June 2023, Toll advised the Relevant Employees that its contract with Coles would not be renewed. It took steps to ascertain employees’ interest in redeployment at Toll, and in taking up employment with Linfox Australia Pty Ltd (Linfox), which would be the new service provider to Coles. Toll also facilitated a process whereby Linfox made offers of employment to many of Toll’s employees, including the Relevant Employees. By mid-February 2024, all 25 Relevant Employees had accepted these offers, and on 27 February 2024 they commenced their new employment with Linfox. At no point did Toll advise the Relevant Employees that it no longer required their positions, or that their employment was terminated.

  1. The TWU contends that it was objectively clear from the circumstances, including the fact that the Coles contract had ended and that the Relevant Employees had not been redeployed within Toll’s business, that Toll had decided that it no longer required the positions of the Relevant Employees, and that it had terminated their employment by its conduct. It submits that the failure of Toll to articulate its decision that the positions were not required, or to announce the terminations of employment, did not alter the reality that these things had occurred. It further submits that although 13 of the 25 Relevant Employees resigned from Toll, their resignations were not effective because the employees were misled by Toll and pressured to resign. Although the Relevant Employees had obtained new jobs, Linfox did not recognise their service with Toll, and therefore the exception in clause 26(g) to the obligation to make severance payments was not engaged. The TWU seeks determinations from the Commission that the Relevant Employees are entitled to severance payments under clause 26(f) of the Agreement, and that Toll failed to consult with the Relevant Employees as required by clauses 14 and 26(c).

  1. Toll contends that although the contract with Coles had ended, it had not made any decision that the positions of the Relevant Employees were no longer required. It submits that the Relevant Employees were general grade 6 drivers whose positions were not tied to the Coles contract, and that it had work for them to do after the end of the contract, but instead the Relevant Employees chose to commence their new employment at Linfox. Toll said that at no time did it terminate the employment of the Relevant Employees, nor did it mislead or pressure any of them to resign. Toll agrees that the exception in clause 26(g) does not apply, but it does not rely on that exception. It maintains that there was no redundancy as defined in clause 26(a) of the Agreement, and that it was therefore not required to make severance payments to the Relevant Employees, or to consult about redundancy.

Background and evidence

  1. Toll was contracted to provide transport services to Coles at distribution centres in Laverton, Truganina and Somerton in western Melbourne. Some 100 drivers were employed by Toll to perform this work, including the Relevant Employees. On 19 June 2023, Coles informed Toll that it would not be renewing the service contract upon its expiry on 26 February 2024. On 20 June 2023, Toll held an online meeting with staff. The general manager for groceries, Stephen Warncken, told employees that the Coles contract would not be renewed, but that there would be no immediate changes. The same day, Toll conducted toolbox meetings with employees and circulated an ‘FAQ’ document (frequently asked questions). In response to the question ‘Will I be made redundant’, the document stated: ‘Understandably, today’s announcement may raise questions for our team. Toll will be exploring all redeployment opportunities for our impacted team members – both within Toll and with the new contractor when the time comes.’ The response went on to say that the entire sector, including Toll, was facing a driver shortage and that Toll was confident that there would be ‘ample opportunities for redeployment’ into other areas of the business. It then stated: ‘Should your role be one of these that may be identified as impacted, we will consult with you about the proposed changes at the appropriate time and prior to any final decision being made.’ Employees were also given a letter from Mr Warncken dated 20 June 2024 which stated that Toll had not yet made any decision regarding redundancy.

  1. On 5 July 2023, Coles informed Toll that the contract to provide transport services for the three distribution centres would be awarded to Linfox. Kaiden Bray, Toll’s operations manager, gave evidence that he prepared a toolbox talk for use in discussions with employees. The text of the talk stated that Toll would work with Coles on a transition plan and that it would explore redeployment opportunities. The talk was delivered by Toll management the following day. Other materials were prepared, including a QR code which would allow employees to access a form to express interest in taking up employment with Linfox, or in being relocated to an alternative Toll worksite. A paper form was also prepared. Mr Bray said that by 31 August 2023, all but two of the employees who had been deployed on the Coles contract had expressed interest in working for Linfox. Of the 25 Relevant Employees, 22 had expressed interest in working either for Linfox or for Toll, and 3 had expressed interest only in working for Linfox.

  1. Mr Bray said that in early October 2023, he prepared a second FAQ document for employees. It stated that if employees accepted a position with another company they must inform Toll, and that they might be in breach of their contracts of employment if they started working for another employer without telling Toll. It also stated that, if employees obtained positions with Linfox, entitlements from their employment with Toll would not carry over to the new carrier: Linfox had by this time confirmed to Toll that it would not recognise the service of any transferring employees. Mr Bray arranged for the FAQ document to be placed on site noticeboards and provided it to another manager for the purposes of conducting toolbox meetings.

  1. Mr Bray’s evidence was that on 1 December 2023, Linfox sent him a list of 33 drivers who had accepted offers of employment from Linfox. The purpose of sharing this information was for Mr Bray to facilitate Linfox’s request for two days of paid training for these employees. The list of 33 drivers included 20 of the 25 Relevant Employees. An updated list provided to Mr Bray on 8 December contained the names of 36 drivers who had accepted employment with Linfox, and now included 22 of the 25 Relevant Employees. Mr Bray said that in January and February 2024, Linfox conducted mandatory training for Toll employees who had accepted offers of employment. It was agreed between Toll and Linfox that training would occur during business hours and that Linfox would reimburse Toll for the time spent by its employees attending this training. On 18 December 2023, Linfox gave Toll a list of employees who were undergoing mandatory training. It included all bar one of the 25 Relevant Employees. An updated list given to Toll on 12 February 2024 showed the names of all 25 Relevant Employees.

  1. Mr Bray said that he had oversight of Toll’s transport contracts with other clients, and that at the same time as he was managing the end of the Coles contract, he was project managing the start of a new contract with Woolworths for its Melbourne Liquor Distribution Centre. This project would commence operation on 1 July 2024 and there would be a requirement for drivers to perform work that was effectively the same as that undertaken on the Coles contract. On 22 December 2023, Mr Bray met with other managers at Toll to explore opportunities for drivers between the end of the Coles contract and the start of the Woolworths contract. It was estimated that there were 9 roles available under a current fuels contract, and several others under Toll’s gas, chemicals and plastics contracts in Altona and Laverton.

  1. Mr Bray said that when the Coles contract ended on 26 February 2024, there was a group of employees who had not resigned from Toll, and that there were still jobs for them. He said that Toll used its Cherry Lane facility to provide ‘interim work’ and to have discussions with employees about relocation to other worksites. He said that on 25, 26 and 27 February 2024 he attended the sites to deal with the contract transition from Toll to Linfox and to set up the Cherry Lane facility in preparation for those employees who had not resigned to continue their employment with Toll.

  1. Peta Strong, Toll’s vice president of human resources, gave evidence that the Relevant Employees were employed under contracts of employment that identified their positions as drivers. The contracts enabled Toll to make reasonable changes to the location of their work and permitted related entities of Toll to be substituted as the employing entity. The contracts also stated that employees could not, without Toll’s consent, be ‘employed by or engaged, concerned or interested in’ any other business where a ‘conflict’ may arise. One of these contracts was appended to Ms Strong’s witness statement. Ms Strong said that on 6 occasions from late November 2023 to late January 2024, she and Mr Bray visited the distribution centres to have discussions with employees about redeployment opportunities. They explained to employees Toll’s need for drivers to service the new contract with Woolworths that would commence in July 2024, and the possibility in the interim of working for Toll People, Toll’s labour hire arm which provides staff to the supply chain, production, transport, warehouse and logistics sectors.

  1. Ms Strong said that on 16 February 2024, she became aware of messages that had been sent to drivers by John Walton, the operations manager at the Truganina site, telling employees that if they were transferring to Linfox, they would need to email their resignations to Toll in the next few days. Ms Strong then arranged for an instruction to be given to site management not to seek resignations from employees at the distribution centres, and that to the best of her knowledge, this was relayed shortly afterwards.

  1. On 22 February 2024, Ms Strong, Mr Bray, and Damien Prince, the general manager of operations, had an online meeting with Wayne Commerford, the TWU organiser responsible for transport workers in the west of Melbourne, at which Mr Commerford raised concerns about the fact that some Toll employees had not been offered employment by Linfox. Ms Strong said that Linfox had not provided any details to Toll about this or explained why some Toll employees had not received offers. Mr Commerford asked whether these employees would be redeployed. Ms Strong said that Toll would continue to consider opportunities for those employees to relocate to other Toll sites, that one driver was being relocated to Toll’s chemical services operations, and that three others were going to Toll’s Toyota site in Laverton North before moving to the Woolworths contract in July 2024.

  1. Ms Strong’s evidence was that between 15 and 26 February 2024, 13 of the Relevant Employees submitted their resignations, and that on 27 February 2024, the day after Toll’s contract with Coles ended, they commenced their employment with Linfox. Ms Strong said that although not all of the resigning employees had provided the required period of notice, Toll did not raise this matter or make any deductions from their final pay. Ms Strong said that the other 12 Relevant Employees did not advise Toll that they were resigning. They too commenced employment with Linfox on 27 February 2024. Ms Strong said that on 23 February 2024, Mr Prince had sent letters to those Relevant Employees who had not resigned, requiring them to inform Toll of their future intentions by 5.00pm on Monday 26 February 2024. The letters told the employees that they would be acting inconsistently with their contracts of employment with Toll if they were to start employment with Linfox without having resigned from Toll. The letters further stated that Toll was operating on the basis that employees would be starting at Linfox on 27 February 2024, but that if this was not the case, they were required to attend Toll’s Cherry Lane site at 8.00am on 27 February 2024. Ms Strong said that this direction was given to those who had not resigned because Toll had not terminated their employment or made any decision about them, and that Toll had arranged for employees to do online training at Cherry Lane.

  1. Ms Strong said that on 26 February 2024, Mr Prince told her that the TWU had sent a text message to employees who had accepted employment with Linfox stating that they should turn up for work on their start date in accordance with their new contracts with Linfox.

  1. Ms Strong said that on 27 February 2024, she attended the Cherry Lane site to manage the attendance of employees who presented for work. The only Relevant Employee who came to the site was Shaun Betros. Ms Strong told Mr Betros that he would be required to move prime movers and trailers from other Toll sites to Cherry Lane and that he would be given further instructions from Toll manager Nick Perry. She said that Mr Betros moved the prime movers but left the Cherry Lane site at around 2.00pm and did not present for work again.

  1. Mr Commerford gave evidence that at no time from 20 June 2023 to 26 February 2024 did Toll approach him about the end of the Coles contract. Despite this, he initiated informal discussions with Toll representatives to advocate for the TWU’s members. From late November 2023, Mr Commerford’s understanding from these discussions was that Toll was arranging for employees to take up employment with Linfox through a process of expressions of interest. Information about this process was placed on noticeboards at the three distribution sites. Mr Commerford said that his expectation was that employees’ service with Toll would be recognised by Linfox, and that on several occasions he reminded management about Toll’s redundancy obligations under clause 26 of the Agreement.

  1. Mr Commerford said that at a toolbox talk in December 2023, Ms Strong said there were 5 positions in Toll that were available for workers who were not successful in obtaining employment with Linfox, and that management had already determined who those workers would be. Mr Commerford said that he understood from Toll that the 5 workers had been reassigned to roles on the upcoming Woolworths contract, and that in the interim they would undertake driving work on Toll’s Toyota contract or, in the case of one worker, driving on Toll’s dangerous goods contract.

  1. Mr Commerford said that in February 2024, he became aware that, while many members had been offered employment with Linfox, some 20 employees had not, and that he then had discussions with Toll about the possible redeployment of those employees. At an online meeting on 22 February 2024, he was told by Ms Strong and Mr Prince that there were 4 positions available and that Toll had decided which employees would be appointed to these roles. Mr Commerford said that Toll then proceeded to make 16 of the 20 employees redundant and directed the other 4 to take up the redeployment positions.

  1. Mr Commerford’s evidence was that on 20 February 2024, a TWU delegate sent him a copy of a text message from Toll manager John Walton telling employees that they had to resign from Toll. Mr Commerford said that he was also told by various union members that other Toll managers were asking employees who had accepted offers from Linfox to resign from Toll and telling them that they would not be able to start their employment with Linfox if they did not do so. On 22 February 2024, the TWU sent a text to its members with an attached flyer, encouraging them not to resign from Toll. The text stated that Linfox had confirmed to the TWU that those who had accepted its offers of employment should turn up for work as per their new contracts. Mr Commerford said that on 22 February 2024 he gave employees who had accepted employment with Linfox a template letter which he encouraged them to sign and send to Toll. The letter, dated 26 February 2024, stated that the employee did not resign and that it was the employee’s understanding that Toll had already advised the employee through its conduct that it would no longer require any work to be done in respect of the Coles contract and that the employee’s position had been terminated effective from 26 February 2024.

  1. Mr Commerford’s evidence was that on 23 February 2024, the TWU received a letter from James Morley, Toll’s group general manager for employee relations, stating that some of the employees who had accepted employment with Linfox had not yet resigned from Toll, despite the fact that they were intending to start work with Linfox inside the notice period that they were required to give Toll, and that under their contracts of employment they were required not to be employed or concerned in any other business where a conflict may arise. The letter stated that a conflict would arise if employees commenced employment with Linfox without first resigning from Toll, and that they would be acting inconsistently with their legal obligations and engaging in serious misconduct. Mr Commerford said that also on 23 February 2024, he became aware of the letter that Mr Prince had sent that day to employees who had accepted offers of employment from Linfox but who had not resigned, stating that their contracts with Toll prohibited employment in any other business where a conflict might arise.

  1. Mr Commerford said that on 27 February 2024, he attended the Cherry Lane site. His understanding was that there would be a meeting with workers who had remained at Toll but for whom there were no redeployment opportunities. He said that around 15 employees attended the site (these were employees who had not received offers of employment from Linfox), and they were told that their positions were redundant. Mr Commerford asked these employees if they had been given a chance to apply for redeployment positions. They replied that they had not heard of these positions.

  1. Hardeep Warring, a driver formerly employed by Toll at the Truganina site, gave evidence that he successfully applied for a job with Linfox. He said that Toll did not tell him that if he accepted employment with Linfox, his service with Toll would not be recognised. He said that on 16 February 2024, a Toll manager, Edin Karastanovic, told him to hand in his resignation by 20 February 2024, and that if he did not do so, Linfox would not employ him. Mr Warring said that he complied with Mr Karastanovic’s request and did so because he thought that he had to in order to be able to work for Linfox. Mr Warring said that Toll never contacted him about redeployment.

  1. Francesco Lanza, a Toll driver formerly deployed on the Coles contract, said that his preference was always to remain employed by Toll. He said that by November 2023, he was looking for guidance from Toll, as he felt that he had not been given any information about what would happen to his job. Mr Lanza said that he had been told by Ms Strong that there were alternative roles as forklift drivers in Campbellfield, but after a visit to that site he concluded that the roles were not suitable because they were not comparable to his role as a truck driver. Mr Lanza said that Toll did not make any other effort to contact him about redeployment opportunities and that he felt that he needed to accept the offer from Linfox to ensure that he remained in employment. On 26 February 2024, Mr Lanza sent Toll the template letter that had been prepared by the TWU, which is described above. Later that day, he attended a meeting with three Toll managers, Mr Karastanovic, Mr Walton and Alaa Hannashmouni, who said that if he wanted to take up employment with Linfox, he would have to resign from Toll. Mr Hannashmouni then emailed him a draft resignation letter. Mr Lanza said that he felt anxious and believed that he would not have a job at Linfox if he did not resign from Toll, so he sent the resignation letter that had been prepared for him by the company.

  1. Giuseppe Lanza, another driver who worked on the Coles contract, said in his statement that his preference was to keep working for Toll, but that he felt that he had no choice but to apply for a job with Linfox to ensure that he was financially secure and had ongoing employment. Toll facilitated his training with Linfox. In February 2024, he accepted an offer of employment from Linfox. Mr Lanza said that he was offered a packing job in Campbellfield, but it was not a suitable position. He said that apart from this, Toll did not tell him about any other opportunities for redeployment, and that he accepted employment with Linfox because nothing was available at Toll. Mr Lanza said that on 26 February 2024, he sent Toll the TWU template letter, stating that he was not resigning from Toll. The same day, he was asked by Mr Karastanovic to attend the Truganina site, and together with ten other workers he was told to hand in his resignation, otherwise he would not be able to take up his employment with Linfox. Mr Lanza said that he felt that he was being forced to sign the letter and he did so.

Submissions of the TWU

  1. The TWU submitted that a ‘redundancy’ had occurred within the meaning of clause 26(a) of the Agreement. It said that the clause contained three integers and each was engaged: despite the absence of any announcement from Toll, it was objectively clear that the company had in fact decided that it no longer required the positions that the Relevant Employees had been doing to be done by anyone, and that this decision had led to the termination of their employment with Toll. The TWU submitted that from 20 June 2023 it was apparent that Toll had decided that the positions of the Relevant Employees working on the Coles contract at the three distribution centres would no longer be required to be done by anyone. It was also clear from information provided to employees by the company that Toll and Coles had in fact agreed not to renew the contract, and that Toll considered that it would be uncommercial to renew the contract on its current terms. It was therefore not the case that Coles had simply terminated the contract, or that Toll had lost it. Rather, the end of the contract was the consequence of Toll’s commercial decision, one which had also entailed an industrial decision, because the end of the Coles contract would necessarily mean that there was no need for the positions of the Relevant Employees who worked on that contract. The TWU said that Toll’s decision had led directly to the termination of the employment of those employees. This was so as a matter of objective reality, and it did not matter that Toll had not told the Relevant Employees about its decision that their positions were no longer required, or that their employment was terminated.

  1. The TWU submitted that the meaning of termination of employment included any act that brings the employment relationship to an end. It referred to the decision of the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200, which held that a termination of employment at the initiative of an employer occurs where the action of the employer is ‘the principal contributing factor which leads to the termination of the employment relationship’. The TWU said that this established a ‘but for’ test: had the employer not taken the action it did, would the employee have remained in employment? It said that in this case, it was the failure of Toll to renew the contract with Coles that had brought the employment relationship with the Relevant Employees to an end, together with Toll’s subsequent failure to redeploy the affected employees. It said that if this was not already apparent on 20 June 2023, it had certainly become so by 26 February 2024, because from the following day it would no longer require the positions of the Relevant Employees at the three distribution centres to be done by anyone.

  1. The TWU submitted that it was objectively clear both that Toll had decided that it no longer needed the positions, and that its conduct had ended the Relevant Employees’ employment. The Coles contract was over and they had not been redeployed at Toll. Mr Commerford’s evidence showed that of those employees who did not receive jobs with Linfox, only 4 were redeployed by Toll within its business, and that the other 16 were made redundant. The TWU said that Ms Strong’s evidence that some kind of individual assessment had concluded that these employees were unsuitable for redeployment should be rejected, and that the Commission should conclude that they were made redundant because there was no work for them. The TWU said that if there was no work for the 16 employees, there could not have been work for the 25 Relevant Employees. As a matter of reality, their employment had been terminated by the conduct of Toll.

  1. In respect of the employees who had resigned from Toll, the TWU contended firstly that the resignations were inconsequential, because Toll had already determined in June 2023 that the roles of these employees would no longer be required, and it was this decision that had led to the termination of each employee; clause 26(a) had therefore been engaged prior to any of the Relevant Employees providing their purported resignations to Toll. Secondly, the TWU contended that these were not genuine resignations but ones that were forced on employees or that were otherwise tainted and ineffective. It referred to the decision of the Full Bench of the Commission in Bupa Aged Care Australia Pty Ltd v Tavassoli[2017] FWCFB 3941 which, in considering the meaning of a forced resignation in s 386 of the Act, stated that the test was whether the employer had engaged in conduct with the intention of bringing the employment to an end or whether termination of the employment was ‘the probable result of the employer’s conduct’ such that the employee had ‘no effective or real choice but to resign’ (at [47]). The TWU said that this had been the case here. Toll had misleadingly told employees that they would need to resign in order to be able to take up their positions at Linfox. It had also told employees that a conflict would arise if they commenced employment with Linfox without resigning from Toll and that this would be inconsistent with their legal obligations. But the TWU said that this was wrong, because employees would effectively be terminated by Toll on the last day of the Coles contract.

  1. The TWU said that there was no reasonable basis for Toll to tell employees to resign and that it had applied illegitimate pressure to employees to do so, in an attempt to avoid its obligations to make severance payments under clause 26 of the Agreement. It was no defence for Toll to say that the relevant managers had acted without actual authority, because they had apparent or ostensible authority. The TWU said that it was plainly the intention of Toll, having regard also to its letter to employees and the various conversations employees had with managers, to bring about the end of each employee’s employment by having them resign. The TWU said that, because the resignations were forced, they were not valid and could not be a bar to the Relevant Employees receiving redundancy entitlements under clause 26 of the Agreement.

  1. The TWU further submitted that Toll had failed to comply with its consultation obligations under clauses 14 and 26(c) of the Agreement. It said that, although there was perhaps no point in consulting with employees about the end of the Coles contract, Toll was nevertheless required to discuss the workplace change with the TWU as soon as practicable. However, beyond notifying the TWU that the contract would be terminated, Toll had failed to initiate meetings with the TWU, including in relation to its decision not to make redundancy payments to employees who transferred to Linfox, nor did it consult about the fact that Linfox would not be recognising their period of service or employee entitlements. The TWU said that the consultation obligations in clauses 14 and 26 of the Agreement had been engaged but that Toll had not complied with them.

  1. The TWU contended that there had been a ‘redundancy’ within the meaning of clause 26(a) of the Agreement and that Toll was therefore required to pay the 25 Relevant Employees severance payments in accordance with clause 26(f). It asked the Commission to determine that the Relevant Employees are entitled to severance payments and that Toll had failed to comply with its consultation obligations in relation to the redundancy of those employees.  

Submissions of Toll

  1. Toll submitted that there had been no ‘redundancy’ within the meaning of clause 26(a) of the Agreement. It said that at no stage had it decided that it did not want the positions of the Relevant Employees to be done by anyone. The position of each of the Relevant Employees was that set out in the contract of employment: each of them was a grade 6 driver employed on a full-time basis, and they were required to work at any location as reasonably directed by Toll. Contrary to the contention of the TWU, the positions were not ones tied to the Coles contract or to the distribution centres at which the Relevant Employees had worked, and it was wrong to say, as the union did, that their contracts of employment could not survive the end of the Coles contract. Toll submitted that it had work for the Relevant Employees to do following the end of the contract. It had also scheduled training for 27 February 2024. It did not need to find new positions for the Relevant Employees because they already had positions as drivers. It was not necessary, in order for Toll to defeat the TWU’s claim, that it point to any detailed plan about what each of the Relevant Employees would do on an ongoing basis, or that it explain how it would fill the gap between the end of the Coles contract and the start of the Woolworths contract some months later. Toll submitted that there was simply no evidence that it had reached a decision that the grade 6 driver positions of the Relevant Employees were not required, and that this was because no such decision was ever made.

  1. Similarly, Toll contended that it had not taken any decision to terminate the employment of the 25 Relevant Employees, nor had it taken any action to bring about this result. Instead, all of the Relevant Employees had decided to accept new employment with Linfox, which commenced on 27 February 2024. Toll said that prior to this date, 13 of the Relevant Employees had decided to resign, but they were not misled or forced to resign. There was nothing illegitimate about managers encouraging them to resign if they were going to commence employment with Linfox. In the absence of any decision by Toll that their positions were no longer required to be performed, and in the face of the secondary employment clause in their contracts, Toll’s warning to the employees was appropriate. The 12 other employees, who did not resign from Toll, were required to attend Cherry Lane on 27 February 2024. They were also required to confirm whether they intended to present to Cherry Lane by 5:00 pm on 26 February 2024, but they did not do so, and only one of them, Mr Betros, attended Cherry Lane the next day, where he was directed to work moving trucks between sites, which he did, but then failed to present for work in the afternoon. All of the 25 Relevant Employees had commenced alternative employment with Linfox on 27 February 2024. Toll had not taken any step to end their employment with the company. There was no redundancy as defined in clause 26(a) of the Agreement, and the Relevant Employees were therefore not entitled to severance payments under clause 26(f).

  1. Toll denied that it had failed to meet its consultation obligations under the Agreement. Clause 26(c) of the Agreement only required it to consult about redundancy ‘in a redundancy situation’, and this would only arise if clause 26(a) of the Agreement had been engaged, which was not the case. It was also wrong to say that Toll had an obligation to consult with employees about a decision not to have Linfox recognise services, as this had been a decision of Linfox, not of Toll. Further, it could not be said that Toll had an obligation to consult with the Relevant Employees about its view that there was no redundancy situation within the meaning of clause 26(a) and that severance payments would not be made.

Consideration

  1. It was common ground between the parties that the Commission is authorised by the dispute resolution procedure in clause 15 of the Agreement to determine the dispute by arbitration, and I agree that this is the case. The dispute concerns whether Toll’s obligations under the Agreement to make severance payments and to consult with employees were enlivened. It is fundamentally a dispute of fact.

  1. Clause 26(f) of the Agreement provides that employees will be entitled to the severance payments set out in that clause ‘in the event that a redundancy occurs’. Clause 26(a) defines when a redundancy will occur. It states:

‘A redundancy occurs in a circumstance where Toll decides that it no longer requires the position that a Transport Worker has been doing to be done by anyone and that decision leads to the termination of the Transport Worker’s employment with Toll.’

  1. There are three essential elements in clause 26(a). First, Toll must decide that it no longer requires the position of the relevant employee to be done by anyone. To decide a matter involves reaching some conclusion or resolution. In my view Toll is correct to say that for a person or organisation to decide upon something, there must be some subjective element. Equally, I agree with the TWU that whether a decision has been made is assessed objectively, in light of all of the relevant facts, and that a decision need not be articulated in order to exist. Secondly, Toll’s decision must pertain to the employee’s position. This term is not defined in the clause or elsewhere in the Agreement. Absent some indication to the contrary, the ordinary meaning of an employee’s ‘position’ in the context of a redundancy clause in an industrial instrument is the position that the employee holds under his or her contract of employment. On one view, the use in clause 26(a) of the present perfect continuous tense – the position that the transport worker ‘has been doing’ – might suggest a concern with the immediate past, and the particular work or role that the employee has most recently been undertaking. But the clause does not speak of work or roles. It is the employee’s current position, under the contract of employment, that must be the subject of the decision. For clause 26(a) to be engaged, Toll must decide that it does not want the position established by the employee’s contract of employment to be done by anyone. Thirdly, this decision must lead to the termination of the Transport Worker’s employment with Toll. Although the clause does not specifically say so, it is clear that it is Toll that must terminate the employment. This is evident from several subclauses, including clause 26(b), which states that Toll will use redundancy as a last resort, and clause 26(d), under which the selection of employees for redundancy will be at Toll’s discretion, but subject to a number of considerations. The clause does not contemplate that redundancy will occur where, after Toll has decided that it does not want the position of a particular employee to be done by anyone, the employee resigns. What is meant by a decision that leads to the termination of employment? In my view, this simply recognises that there must be a link between the decision and the termination and that there may also be a period of time between Toll’s decision that a position is not required and the time when the redundancy is effectuated by Toll terminating the employee’s employment.

What were the positions of the Relevant Employees?

  1. It is necessary first to identify the positions of the Relevant Employees. The contracts of employment of the Relevant Employees were relevantly in the same terms. They identified the positions of the employees as ‘Driver Grade 6’. They stated that the employees would initially be located at one of the three distribution centres, but that Toll could make reasonable changes to the location of work on either a temporary or permanent basis. Clause 2(d) of the contract stated that Toll could, at its discretion, make reasonable changes to reporting arrangements, duties or responsibilities, following consultation. Clause 2(e) stated that any reasonable change of this kind would not give rise to a redundancy and that the contract would continue to apply. The positions of the Relevant Employees under their contracts of employment were general grade 6 driver positions. They were of wide scope. It is very clear that these positions were not ones that were linked to Toll’s contract with Coles or to any of the distribution centres.

  1. During her cross-examination, Ms Strong was asked whether the ‘positions of those employees in respect to the (Coles) contract’ would no longer need to be done after 26 February 2024. She agreed. What Ms Strong clearly meant was that the work performed by Relevant Employees in respect of the Coles contract ended on 26 February 2024. She was not accepting an implied proposition that the Relevant Employees’ positions were tied to the Coles contract. It is clear from the contracts of employment that this was not the case. Their positions were those of grade 6 drivers.

Did Toll decide that it no longer required the positions to be done by anyone?

  1. I find that Toll did not decide that it no longer required the positions of the Relevant Employees to be done by anyone. Ms Strong’s evidence was that Toll had not made any decisions about the Relevant Employees who had not resigned. She did not make the same statement in respect of the Relevant Employees who had resigned, but it is clear that she and Toll regarded those employees as having ended their own employment. I find that there is no evidence of any decision by Toll that it did not require the Relevant Employees’ positions to be done by anyone. Ms Strong also said that on 27 February 2024 there was work available for all of the Relevant Employees. Contrary to the suggestion of the TWU, Ms Strong was a credible witness. I accept her evidence. Further, Ms Strong is the vice president of human resources, and it is implausible that Toll could have made a decision that it no longer required the positions of the Relevant Employees without her knowledge.

  1. The TWU contended that the Commission should conclude or infer from the other established facts that, as a matter of reality and substance, Toll must have made a decision that it did not require the positions of the Relevant Employees. It said that there was no evidence that Toll had turned its mind to redeploying each of the relevant employees, or that it communicated to each of them that there were available redeployment opportunities within Toll’s business. It said that no real attempt was made to contact the Relevant Employees about redeployment, and that the only positions identified as redeployment opportunities for them were associated with the Woolworths contract that was still several months from commencement. It said that Toll had encouraged employees to apply for jobs at Linfox; it did not tell them that this was not necessary because it had other work available. It said that Toll had sought to procure, and therefore wanted, employees’ resignations, and that this must in turn mean that Toll had no work for them and no longer required their positions. It said that 16 of the 20 employees who were not offered employment at Linfox were made redundant, which must have been because there was no work for them, and if this was the case, there was no work for the Relevant Employees either. The TWU submitted that in these circumstances, the inference should be drawn that Toll had in fact decided that the positions of the Relevant Employees were not required, and that its refusal to acknowledge this reality could not be believed or accepted.

  1. I reject this contention. The inference is not available because it is inconsistent with the evidence of Ms Strong, which I have accepted. But even without this, I consider that there would be no valid basis to infer that Toll made such a decision.

  1. First, the absence of any evidence that Toll had turned its mind to the redeployment of each individual Relevant Employee would not support the proposed inference. What is overlooked in this submission is the fact that Toll understood from early December 2023 that most of the Relevant Employees had accepted employment with Linfox, which could reasonably be expected to commence shortly after the end of Toll’s contract with Coles. On 8 December 2023, Toll had been advised that most of the 25 Relevant Employees had accepted offers of employment with Linfox. In January the Relevant Employees had undertaken training with Linfox. The TWU asked why, if there was work for all the Relevant Employees, Toll had not identified workplans for them, or decided who would do what work at a ‘granular’ level. The answer is that it would not make sense to prepare detailed redeployment plans for employees who were understood to be leaving their employment with Toll. This also explains why Toll did not make greater efforts to contact the Relevant Employees about redeployment opportunities in early 2024.

  1. Secondly, I do not accept the premise that a desire of Toll for the Relevant Employees to resign would indicate that Toll had no work for them and did not require their positions. There are other more probable explanations. One is that Toll wanted employees to resign because it understood that they were leaving their employment with Toll to work for Linfox and it expected such employees to formalise this by giving notice, as they were required to do under their contracts of employment. Another is that Toll wanted to know whether any of the Relevant Employees might still want their grade 6 driver positions so as to be able to make appropriate arrangements for such employees. Toll understood from Linfox that all of the Relevant Employees had accepted its offers of employment and were leaving Toll, but the employees had not confirmed this to Toll. Even if one inferred that there was a limited amount of available work between the end of the Coles contract and the start of the Woolworths contract, and that resignations would assist Toll by reducing the pool of employees for whom it might need to find work, or who might at some point need to be made redundant, that would not mean or suggest that Toll had decided that any of the Relevant Employees’ positions were not required. Toll had helped to facilitate the offers of employment that the Relevant Employees received from Linfox, as many employers would do in similar circumstances. But despite any desire for employees to resign, Toll could still legitimately and genuinely require their grade 6 driver positions in the meantime for deployment within Toll’s large logistics business. In this regard, the word ‘requires’ (which could be regarded as a fourth key integer of clause 26(a)) is referrable to what Toll needs, and what Toll needs is a matter of business judgement.

  1. The inference that the TWU asks the Commission to draw is also inconsistent with the commercial reality that it would not make sense for Toll to reach a conclusion that it could not usefully employ any of the Relevant Employees, and make them redundant, shortly before their expected voluntary departure from Toll to take up employment with Linfox. Why would an employer make employees redundant when they are on the point of leaving of their own accord to work for someone else? It only stands to reason that Toll would keep the positions of the Relevant Employees and make every effort to find grade 6 driver work for those of them who might still want their jobs at Toll. Of course it still required their positions. There was nothing about this that was artificial or ungenuine. It was commercially rational. It was also operationally realistic, in the context of Toll’s large logistics business.

  1. Contrary to the TWU’s contention, the fact that Toll decided that it no longer required the positions of 16 employees who did not have jobs at Linfox did not mean that there was no work for the Relevant Employees or that it did not require the positions of the Relevant Employees. Toll was not compelled to reach the same conclusion about the Relevant Employees as it did about the 16. Ms Strong said in her evidence that Toll decided that there was no work available for these particular 16 employees, following an assessment that was made of their suitability for other work. She referred to a document that recorded Toll’s reflections on this matter. The TWU submitted that the document showed little if any indication of an individual assessment and that the Commission should not accept Ms Strong’s evidence that such an assessment occurred. I find that there was an assessment, albeit a rather general one. It was not the case that there was simply no work at all that they could possibly have been given. The full circumstances of these employees are not before the Commission. I note that Ms Strong stated in her evidence that some of them had indicated that they were interested in taking redundancy. In any event, Toll decided that it did not require these particular employees’ positions and terminated their employment. It made no such decisions in respect of the Relevant Employees. It makes sense that Toll would see which if any of the Relevant Employees might still want their grade 6 driver positions on 27 February 2024 and then work out what they would do on an ongoing basis. It was not clear precisely what work employees would do in the coming weeks but it was clear what they would do on 27 February 2024. Toll had scheduled training.

  1. If the positions in the contracts of employment of the Relevant Employees had been tied to the Coles contract, the analysis would be very different. The end of the Coles contract would have meant that Toll could not credibly deny that it no longer required those positions, because as a matter of objective reality, they would no longer exist. Toll’s business judgement as to what it required could not be invoked to deny this reality. The fact of the end of the Coles contract would effectively compel a decision by Toll that the positions were not required. But the positions of the Relevant Employees were general grade 6 driver positions. The Coles contract had been the source of the work on which Toll had chosen to deploy the Relevant Employees pursuant to their contracts of employment. But this was by no means the only work on which the Relevant Employees could be deployed. Toll is a large national logistics company with numerous clients, contracts and business lines, several of which were referred to in the evidence of Mr Bray and Ms Strong. The end of the Coles contract did not of itself end Toll’s requirement for these drivers.

  1. The TWU contended that the work scheduled for 27 February 2024 was scanty and piecemeal, and that unparticularised training and ad hoc truck movements, together with a vague possibility of employees ‘picking up shifts’ with a group labour hire company, all suggested that there was precious little work for the Relevant Employees to do. But even if that is correct, it does not support an inference that Toll had decided that it did not require the positions of the Relevant Employees to be done by anyone. At most it might suggest that, had the Relevant Employees remained in their positions with Toll rather than commencing new employment with Linfox, their positions might not have lasted very much longer. But it is beside the point whether the positions might later have become redundant. The question is whether, as of 27 February 2024, Toll had decided that it did not want the positions. This is the critical date because it was on this day that the Relevant Employees commenced their new full-time employment with Linfox and, as we will see in a moment, thereby ended their employment with Toll.

  1. The TWU contended that, in order to avoid the conclusion that the positions of the 25 Relevant Employees were no longer required, Toll would need to demonstrate that there was sufficient work for all 40 drivers who were taking up employment with Linfox. I reject this. The question of whether each of the 25 Relevant Employees is entitled to severance payments under clause 26(f) requires an analysis of whether clause 26(a) was engaged in respect of each of them. Accepting for the moment the TWU’s contention that an absence of work for employees after 26 February 2024 would support a conclusion that employees’ positions were ‘factually’ no longer required, and that Toll must be taken to have so decided, I find it difficult to see how any individual Relevant Employee could claim to be redundant if there was work available for him (all 25 were men). Only one Relevant Employee attended work at Cherry Lane. It is clear that there was work for employees on that day. It was work that fell within the scope of the contracts of employment for their grade 6 driver positions. It included the training that had been scheduled for those who had not resigned, and I infer that those who did resign could also have been deployed on training had they not resigned. In my opinion, none of the 25 Relevant Employees could say that he would have had no work to do at Toll on 27 February 2024. It was not clear what work the remaining employees would do thereafter but that is irrelevant. Toll had not decided that it did not require the positions of the Relevant Employees to be done by anyone. On the contrary, it had told the 12 non-resigning employees to attend for work at Cherry Lane, and had the 13 others not resigned, I infer that Toll would have told them to attend the site also.

  1. Even if there had been no work available for the Relevant Employees on 27 February 2024, that would not mean that Toll must be taken to have decided that it did not require their positions. Toll could legitimately have continued to require the positions while it worked out what to do with the employees. During this time, it would have been lawful for Toll simply to pay the Relevant Employees for their time. It was not required to give them work. At common law an employer has no general obligation to provide work to an employee, subject to certain exceptions which are not presently relevant (see Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539 at [80]). It has been said that there is a growing acceptance at common law of the right of an employee to perform work (see Quinn v Overland [2010] FCA 799, (2010) 199 IR 40 at [101] (Quinn)), and it is undoubtedly the case that the non-pecuniary dimensions of work are very significant to an employee in a variety of ways. Nevertheless, if a right to perform work is postulated, its legal source must be identified. In this case, I can identify no such source. The Agreement is silent on the matter. The contracts of employment contain no express terms that confer such a right, nor does the text of the contracts otherwise evince a common intention that such a right should exist. Further, this is not a case where a term establishing a right to work can be implied by fact because the conditions for the implication of such a term are not met, including because a term of this kind is not necessary to give efficacy to the contract. In any event, I consider it highly unlikely that an implied term requiring an employer to provide work to an employee would be contravened by a failure to allocate work to the employee for a short period; a term that an employer provide work continuously with no interruptions whatsoever would not be reasonable and would therefore fail to satisfy another of the common law preconditions for the implication of a term by fact. More generally, a short interruption in work would not engage the significant interests of the employee (such as those referred to in Quinn) which would presumably unpin the rationale for the implication of an implied term in the first place.

  1. In short, there was no legal obligation on Toll to give employees work. There was no legal or other consideration that would compel Toll, in the absence of immediately available work, to make a decision that the positions were not required. Although I accept that a decision that the positions were not required could be made without being articulated, and that the existence of such a decision can be inferred from conduct, I find that no such decision was made in this case.

Was the employment of the Relevant Employees terminated by Toll?

  1. Even if Toll had decided that it did not require the positions of the 25 Relevant Employees to be done by anyone, clause 26(a) is not engaged unless this decision has led to the termination, by Toll, of those employees’ employment. I find that this did not occur. Toll did not terminate the employees’ employment explicitly, nor do the established facts support a conclusion that Toll terminated the employees by its conduct. I accept the TWU’s argument that the question of whether an employer has terminated an employee’s employment is to be assessed objectively, and that a termination may be found to have occurred despite the absence of any explicit statement from the employer to this effect. A termination of employment can occur by conduct. Generally speaking, an employer would need to intend to bring the employment to an end, as the TWU acknowledged in its submissions. That too is a matter to be assessed objectively. If for example an employer stopped providing employees with work and ceased to pay them without any good reason (such as a stand down), it would likely convey by its conduct that it had terminated their employment. But nothing of this kind occurred here.

  1. The TWU contended that Toll terminated the employment of the Relevant Employees by its conduct in failing to successfully renegotiate the contract with Coles, which led to the expiry of the Coles contract and the termination of the contracts of employment of the Relevant Employees. I reject this contention. Toll’s inability to renegotiate the contract with Coles on commercially acceptable terms was not an act of termination of employment or an action that had the probable consequence of termination of employment. The Relevant Employees’ positions were not linked to the Coles contract. The TWU contended that Toll had effectively removed the source of the Relevant Employees’ work and that it had failed to find the employees other positions. But the employees still had positions. They were grade 6 drivers. Toll had at least some work for them on 27 February 2024 and could in any event have simply paid them without requiring them to work. It did not terminate their employment.

  1. The TWU submitted that Toll had not contradicted the template letters sent to it by Relevant Employees on 26 February 2024 stating that they were treating themselves as having been dismissed by Toll, nor had Toll refuted a letter sent by Mr Suleyman of the TWU to Mr Morley on 5 March 2024, stating that Toll had terminated the employment of the Relevant Employees in connection with the loss of the Coles contract. The TWU also noted that Ms Strong had said in cross-examination that if she disagreed with something that was put to her, she would correct it, and that presumably therefore she accepted what the employees and Mr Suleyman had said about Toll having terminated the employment of the Relevant Employees. The TWU referred to the decision of the High Court in L. Shaddock and Associates Pty Ltd v The Council of the City of Parramatta (1981) 150 CLR 225 in which Gibbs CJ stated that the failure to answer a letter could constitute evidence of the recipient’s acceptance of the statements made in the letter if the relationship between the parties was such that a reply might properly be expected (at 230); and to Thomas v Hollier (1984) 156 CLR 152, where Gibbs CJ observed that the absence of a reply to a letter may amount to an admission if there are circumstances that make it more reasonably probable that a person who denied assertions made in the letter would answer them (at 157). The TWU contended that Toll must be taken to have accepted the contentions in the employees’ template letters and in Mr Suleyman’s letter that the company had terminated or was terminating the Relevant Employees’ employment. I disagree.

  1. The template employee letters were sent to Toll on 26 February 2024, the day before they started employment with Linfox. Those who had not resigned from Toll had received a letter from Mr Prince on 23 February 2024 directing them to attend for work at Cherry Lane on 27 February 2024. It was clear from Mr Prince’s letter that Toll did not agree with the statement in the template letters that the company had terminated the Relevant Employees’ employment. As to the letter sent by Mr Suleyman to Mr Morley on 5 March 2024, it was plain by this time that the union and the company disagreed about the relevant subject matter, because it was the subject of the dispute that had been referred to the Commission by the TWU in its s 739 application on 22 February 2024. This is not a case where the relationship between the parties made it more probable than not that Toll would refute the contents of these letters if it disagreed with them. It was clear that it did disagree.

  1. The TWU submitted that the Commission should adopt the observation of Lee J in TWU v Qantas Airways Limited (2021) 308 IR 244 that, in determining contested facts, what matters most is usually contemporaneous documents and their proper construction, and the probabilities that can be taken from them (at [21]), and that this approach would lead the Commission to conclude that Toll terminated the employment of Relevant Employees by its conduct. But in my view, the documentary evidence in this case demonstrates the opposite of what the TWU seeks to establish. Toll’s FAQ document of June 2023 told employees that their positions were not redundant, that Toll would be exploring all redeployment opportunities, and that it was confident that ample opportunities for redeployment existed, because Toll, and the entire sector, was facing a driver shortage. There is no documentary evidence that shows that Toll terminated the employment of the Relevant Employees. It shows that the contract with Coles ended, that the Relevant Employees’ contracts of employment were not tied to the Coles contract but to the work of a grade 6 driver, that Toll is a large logistics company, and that it wanted to identify, and had identified, work that Relevant Employees could do on 27 February 2024.

  1. How then did the employment of the Relevant Employees with Toll actually end? In my view, it was terminated by conduct. But it was the conduct of the Relevant Employees that had this effect, not the conduct of Toll. The Relevant Employees ended their employment as full-time drivers with Toll by commencing new full-time employment as drivers with Linfox. By this conduct, which occurred on 27 February 2024, the Relevant Employees made abundantly clear that they would no longer perform work for Toll under their contracts of employment, and that their employment with Toll was now over. It is true that the Relevant Employees took up their new employment at Linfox with Toll’s apparent blessing. Toll had facilitated the process whereby Relevant Employees became employees of Linfox, and cooperated with Linfox in various ways, including by allowing employees to take time off to undertake training with Linfox. But Toll facilitated a choice for the Relevant Employees: they could choose to accept employment with Linfox, which was full-time, ongoing employment in a similar role; or they could remain employed by Toll as grade 6 drivers. Plainly, they could not do both. This was not a case where part-time or casual roles could be performed concurrently for two different employers.

  1. An employee who does not turn up for work and instead goes to work for a new employer thereby ends one employment and starts another. It is the exemplar of an employee’s termination of employment by conduct. It has the same effect as an employee telling the first employer that he or she resigns. It ends the employment relationship. The fact that a number of the Relevant Employees sent Toll the template letter stating that they were not resigning does not alter the fact that in reality they did so.

  1. Toll advised employees that if they did not resign before commencing employment with Linfox, they would be in breach of their contracts of employment. This was correct, insofar as employees did not give Toll the requisite period of notice of termination. On the other hand, I doubt whether any conflict arose, because in my view employees had made clear on 27 February 2024 that their employment with Toll was over, and that they were now employed by Linfox instead. Evidently Toll’s view was that their employment continued beyond this time. In his letter to the TWU of 1 March 2024, Mr Morley stated that the employees who had started work with Linfox without resigning from Toll were required to account for their absence from work and that a failure to provide a reasonable explanation would demonstrate an intention no longer to be employed by Toll. In my opinion, the explanation was clear: they were now employed by Linfox. Perhaps for a time their contracts of employment survived the end of their employment relationship with Toll, such that the ‘no conflicts’ clause continued to apply. In any event, Toll’s views about these matters were genuinely held and at least reasonably arguable. It is not necessary for me to reach a concluded view about whether they were correct because they do not alter my conclusion that the Relevant Employees were not dismissed by Toll, and that they ended their employment relationship with Toll by their conduct. I would add that Mr Morely’s letter of 1 March 2024 is further evidence that Toll had not decided that the positions of the Relevant Employees were not required and that it had not terminated their employment.

  1. What of the resignations that were submitted to Toll by 13 of the Relevant Employees? The TWU contended that the resignations were ineffective. In my opinion however it is ultimately irrelevant whether the resignations were effective, because even if they were not, it would remain the case that these 13 employees ended their employment with Toll on 27 February 2024 when they started their new employment with Linfox. It is relevant to consider instead a different question, namely whether perhaps the circumstances of the resignations may have amounted to a termination of these employees’ employment by Toll.

  1. Section 386 of the FW Act, which defines dismissal as including forced resignation, is not applicable to the interpretation of enterprise agreements, and clause 26 of the Agreement speaks of termination, not dismissal. But let us assume that a termination of employment by Toll within the meaning of clause 26 of the Agreement would include a resignation that was forced upon an employee by the conduct of Toll. Do the statements and actions of the Toll managers referred to in the TWU’s evidence found a conclusion that the Relevant Employees who resigned were forced to do so? In my opinion, they do not. The statements by managers that employees might not be able to commence their employment with Linfox unless they resigned were incorrect. The basis on which these statements were made is unclear. The managers may have thought that Linfox would not want to proceed with employing Toll workers who had not given notice of termination to Toll under their contracts. But in any event, these Toll managers clearly did not speak for Linfox, and if the employees were concerned that by not resigning from Toll they were jeopardising their employment with Linfox, they could simply have asked Linfox whether this was the case. That is what the TWU did when it learnt of these statements. The union then promptly advised its members that Linfox only required them to turn up for work. In any event, these statements did not constitute or give rise to any compulsion. They did not force employees to resign. Similarly, Toll’s statements that employees would be in breach of their contracts of employment if they started employment with Linfox without resigning from Toll cannot sensibly be said to have forced employees to resign. Again, employees could have sought their own advice about this matter from the TWU. It is difficult to see how any of the Relevant Employees could be said to have been compelled to resign by these statements. In any event, the alleged ‘forced resignations’ would in my view more accurately be described as forced acknowledgements of what the Relevant Employees had already freely decided to do, which was to leave Toll to start working for Linfox. There is no suggestion that, but for the allegedly forced resignations, the employees concerned would have remained in their employment with Toll. The employment relationship was ending because the Relevant Employees had decided to leave.

  1. I find that the evidence of the two Mr Lanzas, and also Mr Warring, falls well short of establishing that they were forced to resign. There were no circumstances of compulsion. The Lanzas’ evidence that they accepted employment with Linfox because they were not offered redeployment at Toll does not bear out any lack of practical choice: the fact is that they could have remained in their driver positions at Toll. Their future at Toll might have been uncertain. It is possible that they might have been made redundant later. If this had occurred, they would have been entitled to severance payments under clause 26(f) of the Agreement. On the other hand, if they had chosen to stay at Toll, they would have missed the chance to work for Linfox, because the start date was 27 February 2024. Linfox presumably wanted to offer Coles a seamless transition from Toll and would commence its services the day after Toll’s contract expired. It is simply not correct to say that the Lanzas had no choice but to resign from Toll and accept employment with Linfox. They did have a choice. They chose to take up employment with Linfox, like the other Relevant Employees. All of them commenced full-time employment with Linfox at a time when Toll had not decided that it did not want their positions, and had not, by words or conduct, terminated their employment. Even if the written resignations were not effective, the conduct of the Relevant Employees in starting work at Linfox on 27 February 2024 was effective: it ended their employment with Toll.

  1. The TWU submitted that Toll did not advise employees that if they resigned, they risked foregoing severance entitlements under clause 26. But employees had no such entitlements unless Toll decided that the positions were not required and terminated their employment. These things did not occur. The Relevant Employees did not forego any severance entitlements because no entitlements had been enlivened.  

  1. The offers of employment made by Linfox to the Relevant Employees did not come with recognition of service. Therefore, if Toll had decided that the positions were not required and had terminated their employment, it would have had to pay severance payments under clause 26 of the Agreement. The exception in clause 26(g) of the Agreement would not have applied. This clause states that an employee will not be entitled to a severance payment under clause 26(g) if Toll obtains for the employee ‘suitable alternative employment’, a necessary condition of which is the circumstance that the new employer recognise all previous service of the employee with Toll, and that all entitlements be transferred to the new employer. Toll does not rely on the exception. Instead, Toll contends, rightly, that there was no redundancy within the meaning of clause 26(a). The application of the exception is legally irrelevant because the obligation in the principal clause was never engaged.

  1. In a practical sense however, I suspect that the exception in clause 26(g) played a major role in the genesis of this dispute. The fact that Linfox had not recognised employees’ service with Toll was a bone of contention. Mr Commerford said that he had expected that employees’ service with Toll would be recognised by Linfox. No doubt this would have been the preference of the Relevant Employees. It is likely that they held the general view that Toll should not be released from its obligation to make severance payments to them under the Agreement if their service was not recognised by Linfox. But clause 26 of the Agreement does not work this way. There is no right to severance payments unless the conditions in clause 26(a) are met, which in this case they were not.

Consultation

  1. Clause 26(c) of the Agreement provides that, ‘in a redundancy situation’, Toll will undertake consultation in accordance with clause 14, explore with affected employees and the TWU opportunities for suitable alternative employment, provide reasonable retraining and outplacement support, and provide employees with reasonable paid time off to seek alternative employment. My conclusion above that no ‘redundancy’ occurred within the meaning of clause 26(a) means that there was similarly no ‘redundancy situation’ for the purposes of clause 26(c). There is no textual or other indication that a redundancy situation could exist without a redundancy having occurred. I have found that this was not the case and determine therefore that Toll did not fail to comply with clause 26(c).

  1. The fact that clause 26(c) was not enlivened does not mean that clause 14(a) of the Agreement could not be engaged on its own terms. That provision states that, if Toll is ‘considering workplace changes’ that are ‘likely to have a significant effect’ on employees, it will consult with the TWU and any employees who will be affected by the proposal. The latter expression is defined in clause 14(h) of the Agreement and includes major change to the composition, operation or size of the workplace. The end of the Coles contract was an event that entailed a workplace change that would have a significant effect on the Relevant Employees, however Toll did consult with employees and the TWU about the end of the contract, as explained in the company’s evidence. Had the Relevant Employees chosen to remain in their employment with Toll beyond the conclusion of the Coles contract, further consultation would have been required under clause 14 about the work that the Relevant Employees would perform. However, in my view Toll did not fail to comply with its consultation obligations under clause 14 of the Agreement.

Conclusion

  1. I determine that the Relevant Employees are not entitled to severance payments pursuant to clause 26(f) of the Agreement, and that Toll did not fail to observe its consultation obligations under the Agreement.

  1. Toll did not decide that it did not require the positions of the Relevant Employees to be done by anyone. It did not terminate their employment by words or by conduct. No ‘redundancy’ occurred within the meaning of clause 26(a). The Relevant Employees were therefore not entitled to the severance payments in clause 26(f). The Coles contract had ended, but the positions of the Relevant Employees’ were not tied to that contract. They were grade 6 driver positions. Those positions were still required on 27 February 2024, the day on which the Relevant Employees commenced their new full-time employment with Linfox, and thereby ended their employment with Toll. It is possible that, had the Relevant Employees decided to remain with Toll, their positions would have been made redundant in the future. But this is beside the point. The Relevant Employees may believe that they have lost something in this process, namely recognition by Linfox of their service with Toll, but that is not the case. They did not have an entitlement to have their service with Toll recognised by Linfox, nor did they have an entitlement to severance payments from Toll if their service was not recognised by Linfox. The Relevant Employees had an entitlement to severance payments only if there was a ‘redundancy’ within the particular meaning of clause 26(a) of the Agreement. Despite the valiant efforts of the TWU to argue the contrary case, no such redundancy occurred. The dispute is determined accordingly.


DEPUTY PRESIDENT

Appearances:

P Boncardo and L Hamilton of counsel for the TWU
M Minucci of counsel for Toll Holdings Ltd

Hearing details:

2024
Melbourne
11 and 12 December

Printed by authority of the Commonwealth Government Printer

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Cases Cited

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Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875
Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875
Bupa Aged Care Australia Pty Ltd T/a Bupa Aged Care Mosman v Shahin Tavassoli [2017] FWCFB 3941