Transport Workers' Union of Australia v Transit (NSW) Services Pty Limited T/A Transit Systems
[2021] FWC 6561
•9 DECEMBER 2021
| [2021] FWC 6561 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.472—Protected action
Transport Workers’ Union of Australia
v
Transit (NSW) Services Pty Limited T/A Transit Systems
(B2021/1160)
Australian Rail, Tram and Bus Industry Union
v
Transit Systems West Services Pty Ltd T/A Transit Systems West Services
(B2021/1165)
DEPUTY PRESIDENT EASTON | SYDNEY, 9 DECEMBER 2021 |
Application for an order relating to certain partial work bans - bargaining period - protected industrial action - notice of intention to reduce payments - the Commission’s discretion to vary the proportion by which payments are reduced - reasonableness of calculations under Regulation 3.21 of the Fair Work Regulations 2009 - consideration of fairness between the parties - proportions varied.
[THIS DECISION IS SUBJECT TO A NON-PUBLICATION ORDER UNDER s.594 OF THE FAIR WORK ACT 2009]. 1
[1] Members of the Transport Workers’ Union of Australia (NSW Branch) and the Australian Rail, Tram and Bus Industry Union who drive buses out of certain depots in Sydney are currently taking protected industrial action in the form of a partial work ban on using ticket machines and other fare collection devices. The employers of these members, Transit (NSW) Services Pty Ltd and Transit Systems West Services Pty Ltd respectively, have given notice to employees that their payments will be reduced for each day the partial work ban applies, and also that some employees will not receive a particular allowance that is expressed to be payable when a driver is required to carry fare paying passengers. Each union has applied to the Fair Work Commission for orders varying the proportion by which the employees’ payments are reduced.
[2] In considering making such an order I am required to consider whether the reduction applied by the employers was reasonable having regard to the nature and extent of the partial work bans, and also consider fairness between the parties taking into consideration all of the circumstances of the case.
[3] The partial work bans are ongoing. Both applicant unions sought an expedited hearing so that their members have a clearer understanding of the personal cost of their protected industrial action.
[4] For the reasons set out below, I have decided to significantly vary the proportions.
Background
[5] The employers, Transit (NSW) Services Pty Ltd (“Transit NSW Services”) and Transit Systems West Services Pty Ltd (“Transit West Services”) are currently bargaining with Transport Workers’ Union of Australia (NSW Branch) (“TWU”) and the Australian Rail, Tram and Bus Industry Union (“RTBU”) and their respective members in relation to drivers of public buses in two Regions.
[6] It is necessary to record some underlying and uncontested facts.
a) Both Respondent Employers supply labour (drivers) to related companies;
b) Two other separate entities contract with the NSW Government to provide public bus services:
i. Transit (NSW) Liverpool Pty Ltd contracts with the NSW Government to operate public bus services in Region 6;
ii. Transit Systems West Pty Ltd contracts with the NSW Government to operate public bus services in Region 3;
c) Neither Respondent Employer contracts with the NSW Government;
d) Transit NSW Services’ drivers work in Region 6 and Region 3;
e) Transit West Services’ drivers work only in Region 6;
f) The respondent employers are covered by different industrial instruments and each industrial instrument is with a different union:
i. Transit NSW Services (Regions 3 and 6) is covered by the Transit (NSW) Services Pty Ltd Transport Workers Union and Bus Drivers Enterprise Agreement 2017, which, as the name suggests, covers members of the TWU; and
ii. Transit West Services (Region 6) is covered by the State Transit Authority Bus Operators Enterprise (State) Award as a copied State Award, which covers members of the RTBU;
g) Both Respondent Employers are bargaining with their counterpart union for new agreements for their respective workforces;
h) Save for the number of “trips” a driver may do in a day the work performed by TWU members and by RTBU members is identical;
i) The relevant equipment operated by each group of drivers is identical;
j) Fares are collected via an Opal card reader. Each bus has up to eight Opal card readers. The card readers are operated by the driver logging on via the Bus Driver Console (BDC);
k) None of the above entities actually collect any fares, insofar as drivers do not receive cash payments from passengers and, more importantly, fares charged to passengers via the Opal ticket readers go directly to the NSW Government;
l) Both groups of employees are presently taking industrial action, by way of an identical partial work ban; and
m) Drivers at each respective depot have applied the partial work bans since Monday 22 November 2021 and the bans are continuing. Not every driver has applied the ban every day, in fact on some days in some depots no driver has applied the ban.
[7] The following table summarises the underly factual matters:
Respondent Employer: | Transit (NSW) Services Pty Ltd | Transit Systems West Services Pty Ltd | |
Current industrial instrument: | Transit (NSW) Services Pty Ltd Transport Workers Union and Bus Drivers Enterprise Agreement 2017 | State Transit Authority Bus Operators Enterprise (State) Award | |
Union covering employees: | TWU | RTBU | |
Region: | 3 | 6 | 6 |
Drivers employed: | 351 | 516 | 739 |
Supplies labour to: | Transit Systems West Pty Ltd | Transit (NSW) Liverpool Pty Ltd | Transit (NSW) Liverpool Pty Ltd |
Remuneration reduced: | 25% and no allowance paid | 31.5% and no allowance paid | 31.5% |
[8] Where convenient I will refer to the two employing entities collectively as “the Respondent Employers” and the two companies that contract with the NSW Government as “the Contracting Entities”, and also where relevant all four companies together as the “Transit Companies”.
[9] There is no dispute in this matter that on 16 November 2021 the TWU and RTBU respectively gave notice that relevant members would commence protected industrial action on 22 November 2021 in the following form 2:
“All employees who are members of the Transport Workers Union of Australia, NSW Branch who are employed by Transit (NSW) Services Pty Ltd’s at Leichhardt, Burwood, Tempe and Kingsgrove, will engage in the following industrial action: A ban on the use of ticket machines and other fare collection devices commencing on Monday 22 November 2021 at 12:01am and continuing indefinitely; and
All employees who are members of the Transport Workers Union of Australia, NSW Branch who are employed by Transit (NSW) Services Pty Ltd’s at Smithfield and West Hoxton, will engage in the following industrial action: A ban on the use of ticket machines and other fare collection devices commencing on Monday 22 November 2021 at 12:01am and continuing indefinitely.
All employees who are members of the Australian Rail, Tram & Bus Industry Union, NSW Branch who are employed by the Transit Systems West Services Pty Ltd at Leichhardt, Burwood, Tempe and Kingsgrove, will engage in the following industrial action. A ban on the use of ticket machines and other fare collection devise commencing on Monday 22 November 2021 at 12:01am and continuing indefinitely.” (Opal Ban).
[10] On 19 November 2021 the Respondent Employers issued notices of reduction in employee payments in relation to the partial work ban to all relevant drivers in accordance with s.471 of the Fair Work Act 2009 (“the FW Act”). The notice included the following:
“Payment Reduction
If you are entitled to engage in this partial work ban and you do engage in it, your payments will be reduced by the amounts specified in this notice for each day in which you engage in the partial work ban.
1. We will reduce your hourly pay rate by 31.50% (refer to attachment setting out adjusted hourly pay rates).
2. We consider the use of ticketing machines and other fare collection devices, and the duties associated to the use of those devices, to be an integral and ongoing component of the work performed as a drive of a public transport passenger vehicle. The work is more than just the physical task that is being banned. We consider that you spend 31.50% of the day (at work) performing the work that is the subject of the partial work ban.”
[11] Drivers in Region 3 received a notice in near identical terms however in their notice Transit West Services indicated that it was reducing remuneration by 25%. Transit West Services employees do not receive the allowance for carrying fare paying passengers.
[12] The unions seek orders varying the proportion to the following:
“The Applicant seeks orders varying the proportion by which employee payments may be reduced as follows:
a. 5 minutes of work time;
or, in the alternative:
b. a proportion equivalent to the percentage that a loss in fare collection revenue represents of the Respondent’s total expenses.”
Applicable Principles
[13] The relevant statutory provisions in relation to partial work bans can be summarised as follows:
a) Employees can take industrial action by way of partial work bans (see s.19);
b) Assuming that the necessary requirements are met, such action is protected industrial action;
c) Employers are prohibited from making any payment for any day that an employee engages in protected industrial action (per s.470(1)) unless the protected action is a partial work ban as defined in s.470(3);
d) Where an employee engages in a partial work ban the employer can elect 3 to:
i. continue to make payments in full 4;
ii. by notice reduce the employee’s payment on such days (per s.471(1)(c)); or
iii. by notice refuse to accept the performance of any work at all and not pay the employee at all (per s.471(4)).
e) Where an employer elects to pay employees a proportional amount, s.471 imposes certain requirements;
f) Where the requirements of s.471 are met “the modern award, enterprise agreement or contract of employment that applies to the employee's employment has effect accordingly” (per s.471(2));
g) Whilst s.471 does not provide for the manner in which an employer determines the proportion by which payments can be reduced, regulation 3.21 prescribes the method by which the employer should approach this task5;
h) After an employer gives notice of its intention to reduce payments, an employee or an employee bargaining representative may make an application to the Commission to reduce the proportionate amount (per s.472);
i) Upon application, and only upon application6, the Commission must determine whether or not to vary the proportion;
j) The Commission’s discretion is generally at large7 however the Commission is required to take into account the reasonableness of the proportion specified by the employer (per s.472(3)) and fairness between the parties (per s.472(3)(b));
k) where the Commission makes an order varying the employer’s specified proportion, “the modern award, enterprise agreement or contract of employment that applies to the employee's employment has effect accordingly” (per s.471(2)); and
l) an order made under s.472 cannot be varied or revoked by the Commission (s.603(3)(g)).
[14] Sections 471, 472 and Regulation 3.21 of the Fair Work Regulations 2009 are as follows:
“471 Payments relating to partial work bans
Employer gives notice of reduction in payments
(1) If:
(a) an employee engaged, or engages, in protected industrial action against an employer on a day; and
(b) the industrial action is a partial work ban; and
(c) the employer gives to the employee a written notice stating that, because of the ban, the employee's payments will be reduced by a proportion specified in the notice;
then the employee's payments are reduced in accordance with subsection (2) in relation to the period (the industrial action period ) referred to in subsection (5).
(2) The employee's payments in relation to the industrial action period are reduced:
(a) by the proportion specified in the notice; or
(b) if the FWC has ordered a different proportion under section 472--by the proportion specified in the order;
and the modern award, enterprise agreement or contract of employment that applies to the employee's employment has effect accordingly.
(3) The regulations may prescribe how the proportion referred to in paragraph (2)(a) is to be worked out.
Employer gives notice of non-payment
(4) If:
(a) an employee engaged, or engages, in protected industrial action against an employer on a day; and
(b) the industrial action is a partial work ban; and
(c) the employer gives to the employee a written notice stating that, because of the ban:
(i) the employee will not be entitled to any payments; and
(ii) the employer refuses to accept the performance of any work by the employee until the employee is prepared to perform all of his or her normal duties;
then the employee is not entitled to any payments in relation to the period (the industrial action period) referred to in subsection (5).
(4A) If:
(a) an employer has given an employee a notice under paragraph (4)(c); and
(b) the employee fails or refuses to attend for work, or fails or refuses to perform any work at all if he or she attends for work, during the industrial action period;
then:
(c) the failure or refusal is employee claim action , even if it does not satisfy subsections 409(2) and 413(4), if the related industrial action referred to in paragraph (4)(a) is employee claim action; or
(d) the failure or refusal is employee response action , even if it does not satisfy subsection 413(4), if the related industrial action referred to in paragraph (4)(a) is employee response action.
The industrial action period
(5) The industrial action period is the period:
(a) starting at the later of:
(i) the start of the first day on which the employee implemented the partial work ban; or
(ii) the start of the next day, after the day on which the notice was given, on which the employee performs work; and
(b) ending at the end of the day on which the ban ceases.
Form and content of notice
(6) The regulations may prescribe requirements relating to one or both of the following:
(a) the form of a notice given under paragraph (1)(c) or (4)(c);
(b) the content of such a notice.
Manner of giving notice
(7) Without limiting paragraph (1)(c) or (4)(c), the employer is taken to have given a notice in accordance with that paragraph to the employee if the employer:
(a) has taken all reasonable steps to ensure that the employee, and the employee's bargaining representative (if any), receives the notice; and
(b) has complied with any requirements, relating to the giving of the notice, prescribed by the regulations.
Employer does not give notice
(8) If:
(a) an employee engaged, or engages, in protected industrial action against an employer on a day; and
(b) the industrial action is a partial work ban; and
(c) the employer does not give the employee a notice in accordance with paragraph (1)(c) or (4)(c);
then the employee's payments for the day are not to be reduced because of the ban.
472 Orders by the FWC relating to certain partial work bans
(1) The FWC may make an order varying the proportion by which an employee's payments are reduced.
(2) The FWC may make the order only if a person has applied for it under subsection (4).
(3) In considering making such an order, the FWC must take into account:
(a) whether the proportion specified in the notice given under paragraph 471(1)(c) was reasonable having regard to the nature and extent of the partial work ban to which the notice relates; and
(b) fairness between the parties taking into consideration all the circumstances of the case.
(4) An employee, or the employee's bargaining representative, may apply to the FWC for an order under subsection (2) if a notice has been given under paragraph 471(1)(c) stating that the employee's payments will be reduced.”
Reg 3.21 Payments relating to partial work bans--working out proportion of reduction of employee's payments
For subsection 471(3) of the Act, the proportion mentioned in paragraph 471(2)(a) of the Act is worked out for an employee or a class of employees by carrying out the following steps.
Step 1
Identify the work that an employee or a class of employees is failing or refusing to perform, or is proposing to fail or refuse to perform.
Step 2
Estimate the usual time that the employee or the class of employees would spend performing the work during a day.
Step 3
Work out the time estimated in Step 2 as a percentage of an employee's usual hours of work for a day.
The solution is the proportion by which the employee's payment will be reduced for a day.”
The Evidence
[15] The matter was heard on Tuesday 30 November 2021, being eight days after the protected industrial action commenced. The Commission received evidence from three drivers and from the General Manager of Transit Systems West.
[16] There is no suggestion in the evidence that the bans have caused any disruption to passenger services or performance against schedules.
[17] The Applicants’ evidence was that drivers do not touch or operate the Opal machines except to log in to the BDC to turn them on and off at the start and finish of each shift, and to log the end of each “trip”. Depending on the number of trips in a shift, drivers might operate the BDC for approximately 5-8 minutes per shift.
[18] The evidence focused on the “use” of the BDC and the Opal ticketing machines and the differences between drivers’ work when applying the ban and not applying the ban. Consequently, much of the oral evidence focused on the drivers’ role in dealing with passengers in connection with the Opal machines.
[19] The Respondents argued that revenue protection was an integral component of drivers’ work, which requires drivers to monitor/observe passengers as they tap on, ask non-complying passengers to tap on or exit the bus and to report incidents to management if passengers refused to do so.
[20] The evidence of all parties was that drivers are under particular instructions on what to do when fare-related exchanges with passengers escalate.
[21] The Applicants’ witnesses were cross-examined about how much time is taken up monitoring passengers and also dealing with Opal–related issues such as waiting for passengers who don’t have their card ready, suggesting to passengers that they use different machines and so on.
[22] From the evidence all that can be confidently said is that “sometimes” drivers are required to perform additional work because of such issues. For the most part, however, passengers board and deboard the buses efficiently. The evidence from Mr Tsolakis, for example, was that he deals with a lot of questions from passengers, but no questions regarding tapping on and off. He said in this regard that “even the elderly” have adjusted to the opal system.
[23] The Respondents say that before they issued the relevant notices they:
a) identified the work that would not be performed;
b) determined that the banned work was an integral an ongoing component of the work performed by a driver of a public passenger vehicle;
c) estimated that the usual time the employees would spend performing the work is 40 – 50% of each day/shift;
d) acknowledged that the Commission had in other bus cases used the percentage of revenue to expenses to determine the amount of the deduction;
e) determined that the percentage of the operating expenses to revenue in Region 6 and in Region 3 are the percentages in Confidential Annexure A to this decision 8;
f) considered that the operating expenses to revenue figures should be adjusted by an additional 1.5% in Region 6 and an additional 1% in Region 3, to take into account recent increases in passengers due to the lifting of Covid-19;
g) considered that the time spent on the work in Region 6 was at least as much as 31.5% and that the time spent on the work in Region 3 was at least as much as 25%; and
h) considered that the historic allowance in clause 9(b) of the TWU EA should not be paid.
[24] The evidence was that monies collected electronically from the Opal Machines goes straight to the NSW Government. As I understand the arrangement between the four Transit Companies and the NSW Government, the two Contracting Entities are paid by the NSW Government a certain sum in exchange for the Contracting Entities supplying public bus services (including drivers). The amount the Contracting Entities receive necessarily takes into account the fact that the NSW Government directly receives fares from passengers via the Opal system. This arrangement is different, for example, to the arrangement in Transport Workers Union v Department of Territory and Municipal Services (ACTION) 9(“ACTION”) where the employer collected fares from passengers and its operation was also subsidised with government funds.
[25] Neither Respondent Employer submit that the monies presently payable by the NSW Government to the Contracting Entities will reduce as a result of the bans. The Respondent Employers say there is a risk to future contracts created by the bans.
[26] The whole of the evidence on behalf of the Respondents in this regard was as follows:
“The fare revenue goes to the NSW government. Failure to collect the revenue, or a revenue reduction puts the contracts at risk, puts the renewal of the contracts at risk and is likely to impact on the businesses ability to successfully be award contracts for other regions. It goes to the core of our businesses reputation.
The non-operation of the Opal Card readers results in other losses. We cannot use the on time tracking data to support other tenders or improve performance. Unhappy customers reporting not being able to track the busses on real time apps adversely impacts on the businesses reputation, not being able to quickly track the location of the bus and driver is a safety issue.
The business relies on additional support and investment in infrastructure from the NSW government / Transport for NSW from time to time. Currently we are asking Transport for NSW to cover the cost of retro fitting perspex screens in a number of busses (a covid safety protection measure), we are seeking a financial contribution and support for the introduction of electric busses and we are seeking to swap out some of our busses with newer busses in the NSW government fleet. A failure to collect the revenue impacts on our ability to negotiate those benefits with Transport for NSW.”
[27] Other than these bare assertions, there is no evidence by which the Commission can assess the magnitude of this risk.
The Competing Contentions
[28] The Respondents argued that the banned work includes:
a) monitoring the flow of passengers and allowing them to use the Opal machines;
b) waiting for passengers to correctly tap on; and
c) the continuous GPS tracking through the BDC including being tracked in the event that a duress alarm is activated by a driver.
[29] Some of the ancillary functions of the BDC device are claimed by the Respondent Employers to be ancillary duties. I do not see that this is correct. There is no separate or different task performed (or not) by drivers associated with the fact that the BDC also provides a means to track buses by GPS and to send real-time information to passengers via smart-phone applications.
[30] The TWU argued that the Respondents either did not follow (but ought to have followed) the steps set out in that regulation in arriving at a reduction of 31.5 or 25 percent of daily earnings respectively (plus the $16.3698 daily allowance for carrying fare paying passengers), or grossly exaggerated the usual time spent by employees performing work the subject of the Ban.
[31] The TWU and the RTBU say that the only work that could be classified as work related to the ban is the use of the BDC to control the Opal machines:
“The Applicant has identified, as evidenced in the statements of two drivers in the Regions, that the activities performed by drivers on any one shift which may be classified as work related to the ‘use of ticketing machines and related fare collection’ (i.e. the activities which were to be banned by the Opal Ban) are confined to:
a. switching on and logging into the Opal machine on the bus at the commencement of a shift;
b. logging the commencement of each trip;
c. logging the end of each trip;
d. logging off the Opal machine.”
[32] On the evidence this work only takes between 5-8 minutes per shift, which is approximately 1.04% - 1.67% of a days work.
[33] The Unions argue that the reasonableness of the Respondents’ calculation does not require an assessment of the damages suffered by the Respondents’ business, but rather that the Commission’s enquiry is confined to the reasonableness of the Respondents’ calculations of the proportion of the work not performed. On the evidence the unions argue that the Respondents’ calculations could not be reasonable.
[34] The TWU also submits that applying different proportions in each region, in circumstances where the work and the bans are identical, is also unreasonable.
[35] When considering the nature and extent of the ban under s.472(3)(a) the unions submit that I should take into account the fact that the drivers will continue to provide uninterrupted bus services.
[36] In assessing the fairness between the parties (per s.472(3)(b)) both unions submit that if I was to take the same approach as Deegan C in ACTION, and consider the percentage that fare collection revenue contributes to the overall costs of providing the bus service 10, it would result in no reduction in payment to workers because the Respondent Employers do not collect any revenue.
[37] For essentially the same reasons the RTBU generally submit that the proportion reduction contained in Transit West Services’ notice to RTBU members was “incorrect, unreasonable and vastly unfair”.
[38] The Respondent Employers argued that by the “expenses as a percentage of fare revenue” approach in ACTION is appropriate to apply and would result in proportion reductions in the percentage ranges outlined in Confidential Annexure 1 to this decision. The Respondents’ arguments are vastly different to what the applicant unions say is the result from the same approach. The difference between the submissions is that the Respondents argue that the Commission can and should use the fares received directly by the NSW Government as the Fares revenue figure, as opposed to any fares/revenue received by any of the Transit Companies.
Consideration - General
[39] All of the statutory prerequisites for the making of an order under s.472 are met insofar as:
a) The relevant employees are taking protected industrial action by way of a partial work ban; and
b) The employers have given notice under s.471 that employee payments will be reduced; and
c) Employee bargaining representative have made applications to the Commission.
[40] The final words in s.471(2) are important to understanding the statutory scheme for partial work bans:
“and the modern award, enterprise agreement or contract of employment that applies to the employee’s employment has effect accordingly” (emphasis added).
[41] That is, the proportion specified in a properly issued notice by an employer has the effect of altering legally enforceable obligations and entitlements (subject to any variation of that proportion made by the Commission). Section 471(8) makes it clear that where there is a partial work ban and no relevant notice is given by the employer, then employees are entitled to receive wages in full.
[42] Unsurprisingly, the “notice” referred to in s.471(2)(a) is tightly regulated because of its potentially significant effect on enforceable entitlements. The Fair Work Regulations 2009 regulate the form of notice, mandatory terms to be covered in a notice, the manner of giving notice and, most relevantly, the working out of the proportion to be deducted. 11
[43] It is a matter of discretion as to whether any order should be made. The Commission is generally at large in exercising its discretion to vary the proportion by which an employee’s payments are reduced, although it must consider the two specific criteria in s.472(3). The Commission must take into account: firstly, the reasonableness of the employers’ calculations applying the three-step process in regulation 3.21, and secondly, considerations of fairness between the parties.
[44] Two other aspects of the FW Act’s regulation of industrial action are particularly important: the immunity provision in s.415 and the qualified prohibition on paying or receiving wages for periods of industrial action in s.470(1) and s.473.
[45] Firstly, s.415 of the FW Act provides protection, with qualifications, from legal action in relation to protected industrial action. To the extent that an employer might suffer damage when employees take protected industrial action, the partial work provisions in the FW Act are not a means by which an employer can recover or even ameliorate their damage.
[46] Secondly, in Division 9 of Part 3-3 of the FW Act (ss.470-476) there is a general prohibition on paying or receiving wages during periods of industrial action. The partial work ban provisions are an exception to this general prohibition. Under s.471(1) and 471(2) wages are wholly or partially reduced by reference to the portion of work that is subject to a ban instead of the full reductions (i.e. to zero) available under s.470 and s.471(4).
[47] It is safe to assume that in most jobs there are some portions or aspects of the work performed that are more important than others. Some portions of work might be crucial to the employer’s operation, some might be time-critical, some work might have direct and significant impact on the work of other employees, and some work might be ancillary, less significant, perhaps even replaceable or optional.
[48] It is also safe to assume that the time spent by a worker on different aspects/portions of work might not reflect the significance or relative value of that work.
[49] Regulation 3.21 is directed only to time spent on particular [i.e. banned] portions of an employee’s work. Time might be a fair and proper measure of the value or importance of that portion of work compared to other portions of work, or it might not. Some important tasks might take a disproportionately small amount of time to perform, and some less important tasks might consume a disproportionately large part of a workday.
[50] Section 472(3)(a) requires the Commission to consider whether the calculation under Regulation 3.21 is reasonable. This firstly requires the Commission to assess whether the employer’s methodology and calculation of the time spent on banned work is sound. The Commission might consider whether the employer’s estimations of the time taken to perform certain work are reasonable, whether the employer has included or excluded particular tasks, and so on.
[51] Importantly, the Commission must consider whether the calculation is reasonable “having regard to the nature and extent of the [partial work ban]”. The “nature” and “extent” of the ban entail more than just the time usually spent on the banned work.
[52] A time-based calculation under Regulation 3.21 might not be reasonable, having regard to the nature and extent of the partial work ban, if the calculated proportion does not reasonably reflect the relative value of the banned work compared to other work not subject to the ban. It is important to emphasise that s.471 and s.472 refer to reducing payments by a ratio and that this consideration is directed to the relative value of the banned work rather than its absolute value. Similarly, this consideration is not directed to the absolute inconvenience or damage arising from the partial work ban.
[53] In ACTION Commissioner Deegan reasoned that “work” is capable of meaning something more than the physical task that is banned and can include the “impact” of the banned task on the work of the employer (at [34]). The ban considered in that case Deegan C was to have a much greater impact because “all the operating costs of [the employer] will remain the same while the revenue will be substantially diminished” (at [43]) and because “a large part of the costs of operating the bus service is funded by government subsidy and not the collection of fare revenue” (at [49]). The Commissioner concluded (at [50]):
“It is my determination that the most appropriate factor in determining this proportion is the percentage that fare collection contributes to the overall cost of providing the bus service. Thus, the payments to drivers implementing the partial work ban should be decreased by an amount which reasonably approximates to the percentage that fare collection revenue represents of ACTION’s total expenses. According to the submissions of ACTION this formula would result in the total payment made to each driver for each shift in which the ban is imposed being reduced by 20.1%.”
[54] Considering the “impact” of banned work is a way of considering the relative value of that work. Work that has a greater impact is likely to be more valuable to the employer, even if it can be done quickly. The impact of the work has no place in the time-based calculation under Regulation 3.21, and a close read of the decision in ACTION does not reveal any finding to the contrary by the Commissioner.
[55] If the time-based calculation under Regulation 3.21 is not reasonable because it overstates or understates the relative value of the banned work, the Commission may intervene to vary the proportion deducted so that employees are only paid for the portion of their work that is not the subject of a ban (recognising that the partial work ban provisions are an exception to the general prohibitions in s.470(1) and s.473).
[56] The Commission must take into account both the reasonableness of the calculation under Regulation 3.21 and fairness between the parties. There is some overlap in the matters that the Commission might consider when assessing “reasonableness” (s.472(3)(a)) and also “fairness” (s.472(3)(b)). For example the Commission can and might consider the nature and extent of the partial work bans when considering fairness between the parties.
Consideration – The Calculation under Regulation 3.21
[57] The starting point for the requisite analysis is the reasonableness or soundness of the Respondent Employers’ calculations.
[58] In the present matter much depends on how one is to look at the “work” to which the ban applies. If the “work” is the physical activity of the driver when operating or touching the BDC in order to activate the Opal machines, then the only available conclusion on the evidence is that the work is performed for up to 8 minutes per shift.
[59] At the other extreme, if the “work” is the driving of a bus on which a BDC/Opal machine is operating, then literally all of the work on a shift would be captured. No party suggests that this is correct, and properly so.
[60] The bans are obviously designed to have an impact on the Respondents without causing dislocation to the public and without causing loss of income for drivers.
[61] The bans are directed to an important aspect of the work performed: the drivers perform tasks that facilitate the collection of fares collected directly by the NSW Government. The point of the ban is to not perform the tasks necessary for the collection of fares, whilst still performing the tasks necessary to provide service to the public.
[62] In my view the “work” that is the subject of the bans is all the essential tasks performed by drivers in order to allow fares to be collected. This “work” is more than simply turning on the BDC at the start of the shift and more than making quick entries on the BDC at the end of each trip. The Respondents refer to “revenue protection” as a key responsibility which entails activities such as monitoring usage of the Opal machines, assisting passengers to use the readers, and conversing with those who can’t or won’t tap on. I accept that this work is also captured by the ban.
[63] However these activities must be distinguished from the work of the driver associated with boarding and deboarding of passengers, which occurs regardless of whether passengers are charged a fare.
[64] That is, the relevant work for the purposes of Regulation 3.21 is the additional work necessary for drivers to perform in order to facilitate the collection of fares using the Opal machines, over and above the work of boarding and deboarding passengers.
[65] The Respondents estimate that 30-50% of each shift/day is taken up on relevant activities.
[66] The Respondents have only provided an estimate because “it was difficult to precisely calculate” the relevant proportion, which is understandable in expedited proceedings. The Regulation does not require the employer to do any more than “estimate the usual time”, which contains not one but two terms of imprecision. Employers need only estimate, rather than “measure” the time, and they need only to estimate the “usual” time. Employers must make this estimation before issuing the notice to employees, and so in most instances the employer’s estimate is a prediction unless the ban is well-established at the time the notices given. Similarly, the Commission is not required to measure time or to consider whether the employer’s estimate is correct, only whether the proportion was “reasonable” having regard to certain criteria.
[67] The Respondent Employers’ estimate is intuitively too high but in any event it does not adequately distinguish between the time taken to board and deboard passengers compared to the time spent purely on fare-related activities.
[68] For some passengers the additional time to use the Opal machine could be significant, for example if they do not have their card ready or refuse to tap on, but for most passengers the additional time taken to tap on and off is very short, in fact a matter of seconds. Accepting that there is some additional time taken by each passenger, it is still impossible to accept that the additional time could be 30-50% of each shift.
[69] One further complicating factor is that the buses obviously run to a timetable. To the extent that less time on each trip is taken up on fare-related activities, in practical terms no time is saved or redirected as a result. Theoretically, each individual service is less likely to be late or delayed because of the ban on fare-related activities, but the bans do not allow driver to spend more time in their day on other duties.
[70] Fortunately I do not have to make my own calculation of the time proportions under Regulation 3.21. There is not sufficient evidence for me to properly do so but more importantly, my task is only to assess the reasonableness of the employers’ calculations.
[71] In the context of the FW Act and Regulation, I find that the Respondents’ estimates are too high because they take into account aspects of the work that should not be taken into account.
[72] In having regard to the nature and extent of the bans, including the significant impact of the banned work on fare collection activities and performance targets, I am still satisfied that the Respondents’ estimates are not reasonable. The proper time spent on banned work is greater than the 5-8 minutes per shift suggested by the applicant unions, but it is still a long way short of the 30-50% estimated by the employers.
Consideration – Fairness Between the Parties
[73] In this matter the primary consideration in relation to the fairness between the parties is the fact that neither Respondent Employer, and neither Contracting Employer, has suffered any reduction in revenue or other direct financial detriment because of the partial work bans. Further, there is no disruption to public bus services arising from the partial work bans.
[74] If wages are reduced because of the notice given by the Employers, then the Transit Companies will be better off in monetary terms than if no ban was in place at all. That is, the Respondent Employers and/or the Contracting Entities will receive a windfall gain because their labour expenses will reduce and their revenue will remain unchanged.
[75] There is said to be a risk that the Contracting Entities might be disadvantaged in future contracts, and there is said to be a risk to current negotiations with Transport NSW in relation to a financial contribution towards retro-fitting Perspex screens in a number of buses. I do not regard these risks to be any more than theoretical, particularly given that the evidence led by the Respondent Employers was brief and generalised.
Conclusions and variations
[76] In considering both mandatory factors in s.472(3) I am comfortably satisfied that it is appropriate to vary the proportions stated in the notices issued by the Respondent Employers.
[77] The fact that the Contracting Entities and the Respondent Employers have suffered no disruptions to bus services arising from the partial work bans, and will similarly suffer no reduction in revenue but in fact stand to make a windfall gain, strongly support a significant reduction in the proportion to be deducted, if not a complete reduction.
[78] There is some actual reduction in the duties performed by drivers associated with the partial work bans, being primarily the drivers’ activities in operating the BDC (up to 8 minutes per shift) and also by way of the fact that drivers spend less additional time per shift monitoring and interacting with passengers as they use the Opal machines.
[79] The applicant unions calculate that work of operating the BDC is 1.04% - 1.67% of a days work. In other circumstances these percentages would be adjusted upwards to capture the fact that drivers spend less additional time per shift monitoring and interacting with passengers as they use the Opal machines and the relative importance of this work. However, in light of the fact that any upward adjustment would deliver a windfall gain to the Respondent Employers, and as a matter of fairness between the parties, it is not appropriate to do so in this case.
[80] The unions’ estimate is a range from 1.04% to 1.67% which reflects differences that might arise depending on the number of trips made in a shift. There does not seem to me to be a compelling reason to differentiate between drivers in Region 6 and in Region 3, particularly given the nature and extent of the bans are identical in each Region. In this case, and for the sake of uniformity between the regions, I have decided to reduce the proportion deducted for drivers in both regions to 1.5%.
[81] Therefore, in light of the above, I will make orders under s.472(1) varying the proportions deducted by the Respondent Employers in both matters to 1.5%. 12
Residual matters
[82] There are two residual matters to resolve.
[83] Firstly, the notices issued by Transit (NSW) Services Pty Ltd to its employees included a statement that employees would not receive a certain allowance on each day in which they applied the partial work ban. In the course of the hearing it was agreed by all parties that the payment or non-payment of the allowance was not a matter that engages s.471 of the FW Act and therefore not a matter about which the Commission can make any orders under s.472.
[84] Secondly, the Respondents filed and led evidence that they claim is commercially sensitive and confidential. Prior to the hearing I made orders under s.594 restricting publication of that material. I have crafted this decision so as to only include specific references to this confidential evidence in a separate annexure and will make a further non-publication order in relation to that Annexure. 13 As a precaution I will also make a non-publication order for a short period over the whole of this decision, but only to allow for the possibility that a party might apply for a more permanent non-publication order.
DEPUTY PRESIDENT
Appearances:
Ms A Owens-Strauss for the Transport Workers’ Union of Australia
Mr D Babineau for the Australian Rail, Tram and Bus Industry Union
Ms S Wellard for the Respondents
Hearing details:
2021.
Sydney (By Video using Microsoft Teams)
November 30.
Printed by authority of the Commonwealth Government Printer
<PR736588>
CONFIDENTIAL ANNEXURE A
[Subject to a Non-Publication Order by the Fair Work Commission]
1 PR736589.
2 Extracted from the relevant Notices of Intention to take Protected Industrial Action (per s.414 of the FW Act).
3 Transport Workers Union v Department of Territory and Municipal Services (ACTION) (2010) 202 IR 1 at 9,[2010] FWA 4558 at [36].
4 In reliance upon the exception to the prohibition in s.470.
5 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ASC Pty Ltd (2012) 218 IR 263 at 272, [2012] FWA 1377 at [30].
6 Per s.472(2).
7 But see the general obligations of s.578.
8 Confidential Annexure A is subject to a non-publication order made under s.594(1) of the FW Act.
9 (2010) 197 IR 1, [2010] FWA4588
10 See (2010) 197 IR 1 at 11, [2010] FWA4588 at [50].
11 See Fair Work Regulations 2009, clauses 3.21-3.24.
12 PR736590.
13 PR736589.
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