Transport Workers' Union v Transit Australia Pty Ltd T/A Marlin Coast Sunbus - [2017] FWC 1531

[2017] FWC 1531

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.472 - Application for an order relating to certain partial work bans

Transport Workers’ Union

Transit Australia Pty Ltd T/A Marlin Coast Sunbus

(B2017/166)

Commissioner Spencer

BRISBANE, 22 MAY 2017

Application for order for wage reduction relating to certain partial work bans. Considerations of fairness between the parties, should not take into account the financial position of the holding company of a business, only the relevant entities to the immediate bargaining Agreement.

Introduction

This decision arises from an application for Orders relating to certain partial work bans, made pursuant to s.472 of the Fair Work Act 2009 (the Act). The Application was filed in the Fair Work Commission (the Commission) by the Transport Workers’ Union of Australia (TWU/the Applicant) in relation to protected industrial action taken by employees of Transit Australia Pty Ltd T/A Marlin Coast Sunbus (the Respondent/the Employer).

The Respondent stated it operates a bus route service, operating services within the Cairns area. The impact of the protected industrial action is known to the Respondent, following its implementation on Thursday, 23 February 2017.

On 17 February 2017, the Applicant gave notice to the Respondent that it intended to impose a partial work ban on the collection of fares (by drivers) commencing at 5.00am, Thursday 23 February 2017 and continuing until 5.00am, Friday 24 February 2017. In response, on 21 February 2017 the Respondent issued a notice via email, pursuant to s.471 of the Act, to its employees who proposed to engage in the partial work ban (the notice). The Respondent’s notice informed employees that their payment of wages for the period of the industrial action, for each employee, would be reduced by 51%.

Accordingly, on 22 February 2017 the Applicant made an application under s.472 of the Act seeking an Order to vary the amount, by which payments made to the employees taking part in the protected industrial action, would be reduced from the proposed 51% to a 16% deduction of employees’ wages, payable for the period between 5.00am, Thursday 23 February 2017 and continuing until 5.00am, Friday 24 February 2017.[1]

The matter was heard in Brisbane on 16 March 2017. The Applicant was represented by Mr Lee Norris, TWU Industrial Officer, with the TWU witnesses appearing by Video Link from the Cairns Family Court House. The Respondent was represented by Mr Ian MacDonald, National Industrial Relations Manager, from the Australian Public Transport Industrial Association, with permission to appear pursuant to s.596 of the Act. Directions for the filing and serving of the submissions were issued by consent of the Parties. Submissions and witness statements were filed and served by the TWU on 6 March 2017 and by the Respondent on 10 March 2017.

During the Hearing on 16 March 2017, a further issue arose as raised by the Applicant as to the corporate structure of the Respondent entity. The Applicant argued that the financial position of the ultimate holding company of a business, is a relevant factor in considering the ‘fairness between the parties, taking into consideration all of the circumstances of the case’. The Applicant argued this particularly with regard to s.472(3)(b), in relation to the reduction of wages, as it argued it related to the impact and fairness on the Respondent entity and its parent company. The Respondent stated that this was a new part of the case they were not in a position to respond. Accordingly, further Directions were set by consent for the filing of further submissions on this matter. By agreement of the parties, the matter was listed for a further hearing on 4 May 2017. The Respondent’s representative appeared by Video Link from Sydney.

Legislation

Sections 471 and 472 of the Act relevantly state:

Section 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 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.

Section 472 - Orders by FWC relating to certain partial work bans
(1) FWC may make an order varying the proportion by which an employee's payments are reduced.
(2) FWC may make the order only if a person has applied for it under subsection (4).
(3) In considering making such an order, 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 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.

Regulation 3.21 of the Fair Work Regulations 2009 also has application:

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.

Summary of Applicant’s Submissions and Evidence

The Applicant submitted that on 21 February 2017, the Respondent had emailed all employees to give notice under section 471(1)(c) of the Act. The Respondent set out in the notice, as submitted by the Applicant, that they considered the ‘industrial action period’ for the purposes of section 471(5) of the Act, was from 12.01am on 23 February 2017 until 11.59pm on 24 February 2017.[2] During the industrial action period, the Respondent proposed on the notice that a deduction of 51% to be made to any wages payable for the period for an employee engaging in the partial work ban. The notice provided that the Respondent calculated that the usual amount of time spent in engaging in the partial work ban, the taking of fares based on an eight hour shift (on the duties the subject of the ban) is 96.5 minutes out of 480 minutes that is 96.5 minutes resulting in a 20.1% reduction.[3]

The Applicant submitted, the appropriate result is to vary the employer’s notice from 51% to provide for a 16% deduction, from the daily wages of employees, who took part in the partial work ban. The Applicant calculated the 16% deduction as follows:

“On average 150 tickets are issued or collected per 7.6 hour shift. Each action of issuing a ticket takes 30 seconds. 75 minutes of a 7.6 hour shift represents approximately 16% of the normal time of a bus driver over a 7.6 hour shift.”[4]

The Applicant argued that the deduction proposed by the Respondent is not consistent with the work time lost due to the partial work ban, when considered in accordance with Regulation 3.21 of the Fair Work Regulations 2009 (FWR) as set out above. Applying this method, the Applicant stated, would result in a deduction of 20.1% on the Respondent’s own figures, that being 96.5 minutes as a percentage of 480 minutes.

The Applicant submitted that the Respondent was reducing wages by 51% to recoup lost revenue that is foregone, due to the partial work ban. The Applicant submitted that this approach was not consistent with Regulation 3.21, but that the approach taken by the Respondent is identical to the way damages are assessed by the Courts. That is as stated by Blackburn B from Livingstone v Rawyards Coal C:[5]

“I do not think there is any difference of opinion as to its being a general rule that, where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages you should as nearly as possible get that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation reparation.”

The Applicant accepted the approach to the calculation of the reduction in wages written by TWU v Department of Territory and Municiple Services (ACTION),[6] (ACTION case), where Commissioner Deegan held:

“Regulation 3.21 provides the steps for working out the proportion. In applying Step 1 of that formula ACTION has identified “the work that [the employees are] proposing to fail or refuse to perform” as being the work of “driving a passenger vehicle for consideration” and has notified each driver that his or her payment will be reduced by an amount equal to the amount of time that the driver fails to perform that work. The TWU contends that it is the physical task of fare collection that is the “work” that the drivers are proposing not to perform, and that their payments should be reduced by only a proportion equal to the amount of time the driver would spend each shift performing that specific task.”

The Applicant submitted this approach gives proper effect to how the broadly discretionary decision required by s.472 should be reached, by weighing the relevant considerations, not elevating one over the others. The Applicant stated that the approach adopted by the Respondent gives no such effect to s.472, as it seeks to compensate for lost revenue, as if it had proved a breach of contract or commission of one of the economic torts. The Respondent, as submitted by the Applicant, seeks to exercise an approach akin to an assessment of damages, rather than applying the formula in Regulation 3.21, based on the reasonableness of the partial work ban, having regard to its nature, extent, and fairness between the parties.

In addressing the relevant reduction, the Applicant relied on the affidavit of Mr Keith Goldie, employed as a bus driver by the Respondent. Mr Goldie stated he was rostered to work on 2 March 2017 from 6.05am until 10.48am. Once Mr Goldie had completed his shift, he obtained the printout that reflected he had sold 72 tickets and checked 20 pre-paid tickets. Mr Goldie, during his shift on 1 March 2017, sold 30 tickets in a row during peak times. The ticketing machine had recorded these tickets were sold between 1.28pm to 1.36pm; therefore Mr Goldie estimated each ticket sale took around 16 seconds. Further to this, Mr Goldie provided there are no ‘Go Card’ systems in Cairns, as there is in other parts of Queensland, rather all tickets must be purchased from a bus driver. Mr Goldie submitted, based on his shift as described, he would have spent approximately 18.5 minutes on ticketing out of the 283 minutes of his shift, which equates to 6.5% of the time on the shift selling or checking tickets. Mr Goldie stated his calculations provided can increase or decrease the time taken on each ticket sale, depending on the time of say and circumstances of the shift. [7]

The Applicant also relied on the affidavit of Mr Neil Graham Lennon, bus driver of the Respondent. Mr Lennon stated that on 1 March 2017 he had worked a split shift. Mr Lennon submitted his shift was 223 minutes, during his shift he had sold 31 tickets and checked 26 pre-paid tickets, which he described as a below average shift. Mr Lennon’s estimation, based on a 223 minute shift, with approximately 7 minutes spent on ticket sales (as indicated by the ticketing machine as being ‘active’), Mr Lennon took 10 seconds to sell a ticket which equated to 2.5% of the whole duration of his shift. [8]

The Applicant provided the affidavit of Mr Gregory Russell Osuch, bus driver of the Respondent, who submitted that on his scheduled shift of 4 hours and 56 minutes, he had estimated to have spent on average 8 seconds to collect a fare from a customer. Mr Osuch calculated he had spent 10 minutes on selling and checking tickets in a 296 minute shift, which was 3.38% of the total shift. [9]

The Applicant relied on the affidavit of Mr Stephen Moore, bus driver of the Respondent. Mr Moore submitted that his typical shift was from 3.39pm until 11.39pm. Mr Moore calculated, based on a 7.6 hour shift, he had spent 11 minutes collecting fares from passengers; this had amounted to 2.41% of his total shift. [10]

The Applicant submitted the affidavit of Mr Russel Vieritz, TWU Far North Queensland Organiser. Mr Vieritz submitted there have been similar bans on collecting fares since 7 October 2016, where the Applicant had previously notified the Respondent of proposed protected industrial action, including a ban on collecting fares that was to take effect on 13 or 14 October 2016. Mr Vieritz stated that in the prior dispute, a ‘without prejudice’ settlement of the dispute was reached whereby the Applicant accepted a 20.1% deduction. Mr Vieritz submitted that bus drivers do not make exorbitant wages. The Applicant stated the ordinary time rate for a bus driver under the Marlin Coast Sunbus Union Enterprise Agreement 2012 is $22.76 per hour. [11]

The Applicant submitted the Respondent’s holding company has the ability to absorb the cost of the partial work ban; therefore, it would be fairer between the Parties to give greater weight to all of the circumstances than just the Rule 3.21 calculations.

The Applicant submitted that the Respondent is seeking a significant deduction which no other case has ever approached in quantum. The Applicant submitted the below table, which provides a summary of previous deductions, arising from prior cases.[12]

CASE	1*	2**
TWU v Department of Territory and Municiple Services (ACTION)[2010] FWA 4558	66.66%	20.1
United Voice – NT Branch v Commissioner for Public Employment for the Northern Territory[2014] FWC 1185	24.6%	15%
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ASC Pty Ltd[2012] FWA 1377	5 – 46.5%	5 – 28.5%
The Australian Institute of Marine and Power Engineers v Port of Brisbane Pty Ltd[2011] FWA 4653	35%	35%
Bowers v Victoria Police[2011] FWA 6960	6.25%	6.25%

1*Deduction notified by employer
2**Deduction decided by Commission

The Applicant submitted that no party, to a s.472 matter, has achieved a figure close to an arbitrated deduction of 51%. The Applicant argued that in the case factually most closely aligned to this matter, the ACTION case, Commissioner Deegan reduced a claim for a “2/3rds” deduction to a 20.1% deduction. The Applicant submitted that whilst there are varying circumstances which explain the above results, the overarching explanation relates to employers in the cases generally, taking an approach that focuses on compensation for lost revenue.

The Applicant submitted, in relation to considerations of fairness consistent with the jurisdiction in s.471(1), consideration of the appropriate deduction should have regard to the fact that the Respondent is a large corporation with a minor loss of revenue arising from the partial work ban. The Applicant further submitted that the employee’s wages should also be considered. Accordingly, the Applicant emphasised there is a need to avoid awarding a reduction that is designed to do no more than place the Respondent in the position it would have been in had the partial work bans not occurred and there is a need to maintain a broad consistency in the way the discretion in s.472 is exercised.

The Applicant argued that if loss of revenue figures is a relevant consideration, for the purposes of considering fairness between the parties, such figure from the Respondent should be examined with consideration given to Marlin Coast Sunbus as merely a registered business name, not the actual corporate entity. The Applicant submitted that the business name and this business is part of the overall Transit Australia Group Pty Ltd.

The Applicant submitted the 2015/16 financial return for Transit Australia Group Pty Ltd. During that period, it had received $174,039,191[13] in revenue. The Applicant stated that assuming the Respondent operated every day (excluding Christmas Day and Easter Friday); this amounts to a daily average of $479,466[14]. Taking the alleged lost revenue in paragraph 5 of the Respondents submissions of 23 February 2017 ($8271), there then has been a 2.38% loss of daily revenue across the operations of the parent business group or holding company. Further to this, taking the figure in paragraph 6 of the Respondent’s submissions of 23 February 2017 that is the fares revenue generated annually represents 4.65% of the Transit Australia Group Pty Ltd.’s annual revenue.

The Applicant submitted, in order for the Commission to consider fairness between the parties and in order to consider all of the circumstances of the case, the Commission must also take into account whether the financial position of the ultimate holding company of a business is a relevant factor in the consideration of ‘fairness’ under the Act.[15]

The Applicant submitted that it would not be fair to make a comparison between a group of approximately 45 bus drivers and a loose collection of assets, revenue, and expenses of a business described as Marlin Coast Sunbus, when it sits within a larger corporate entity. The Applicant submitted that this would not be fair as Marlin Coast Sunbus is a business name and registration of a business name does not create a corporate entity.

The Applicant submitted Marlin Coast Sunbus is owned by the corporate entity Transit Australia Pty Limited (this was acknowledged by Mr John Calabro, Chief Operations Manager of the Respondent, during his cross examination at the Hearing conducted on 16 March 2016). The Applicant submitted the entity Marlin Coast Sunbus is a wholly owned subsidiary of Surfside Buslines Pty Ltd, and that Surfside Buslines Pty Ltd is a wholly owned subsidiary of Transit Australia Pty Limited.

In addressing the relevant reduction, the Applicant relied on Commissioner Deegan’s reasoning in the ACTION decision, as per the methodology as set out:

“[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%.”[16]

The Applicant provided that the comparison of fairness between the parties is a value judgement, and in making such an assessment, the Applicant that the Commission cannot disregard, that the ultimate holding company of the company operating this business has overall revenue of $174, 039, 191. The losses due to the ban on 23 February 2017 were $8271, as provided by the Applicant. In addition, the Applicant referred to the uncontested evidence of Mr Vieritz, that bus drivers are described as low income earners.

The employer has sought a reduction on the basis of revenue lost and the Union states that a damages style assessment has been taken.

Summary of Respondent’s Submissions and Evidence

The Respondent submitted that in the notice provided to the employees on 21 February 2017, they had estimated an employee would take 96.5 minutes to undertake the physical task of collecting fares from passengers, in an average 8 hour shift, which would account for 20.1% of an employee’s time.

The Respondent submitted in October 2016, when their employees undertook similar protected action by non-collection of fares, the Respondent deducted 20.1% from the wages of participants who took the partial work ban without challenge from the Applicant. Since the protected action taken in October 2016, the Respondent has received further legal advice regarding their rights to deduct a fair and reasonable proportion of the employees’ wages, and has determined that the most appropriate factor in determining the proportion is the percentage that the fare collection contributes to the overall costs. That ratio has been calculated by the Respondent to be 51% of the driver hourly rate.

The Respondent submitted, following legal advice and further legal consideration of the time spent by an employee to undertake their tasks associated with the collection of fares, which has been identified as approximately 36.7% of their time.

The Respondent relied on the affidavit of Mr Calabro, to identify the percentage of time taken by a bus driver of the Respondent to undertake tasks associated with the collection of fares. Mr Calabro estimated it would take approximately 36.7% of the employee’s time on their shift.[17] Mr Calabro submitted that he had made an arbitrary assessment of the associated tasks with fare collect, which took into account, not only the time spent in dispensing tickets, but the additional obligations such as dealing with passenger, such as whether they are inquisitive or aggressive, as set out in the Driver’s Handbook.[18] Mr Calabro submitted that he also took into account the obligations to reconcile the cash box, which does not occur if the fares are not collected. Mr Calabro assessed that at least 164 minutes out of a standard 7.6 shift would not be taken up by the non-collection of fares and this time represents 36.7% of a standard shift. [19]

Mr Calabro in his evidence stated that he disputes the brevity as set out in the evidence of the drivers with regard to taking to the time to collect fares. Mr Calabro provided in his statement as follows:

“10. Annexed hereto and marked “E” is a copy of the ticket sales and concessional ticket sales for February 2017. The sales on 23 February show a variance in excess of 50% from other days during the month. On 23 February, from a total of 638 trips for the day, 45 drivers out a total of 76 drivers refused to take fares, whether full fares or concessional fares and by their actions the Applicant’s members allowed our passengers to travel for the entirety of their trip on that day for free, without recompense for the trip.
11. When assessing the payment reduction of wages fin the Notice referred to in annexure “A” and for the purposes of the notice being 51% we assessed the reduction on the basis of legal advice to the effect that a decision of the Fair Work Commission, Transport Workers Union v. Department of Territory and Municipal Services (ACTION), [2010] FWA 4558 had decided on 18 June 2010 that the most appropriate factor in determining the proportion in the ACTION Bus case was the percentage that fare collection contributes to the overall cost of providing the bus service.
12. In the case of the Respondent the percentage was calculated by dividing the total expenses of the operation in Cairns ($16,525,751.00) against the cash fares taken ($8,426,935.00).
13. The Respondent has an old Q Connect contract for the operation of route services in the Cairns Area which expires on 4 November 2018. The Respondent relies upon the fare box for its revenue to operate its services but the Respondent also relies upon payments from the Queensland Government to ensure the total costs of the services are covered as set out above. If the revenue raised by the Respondent falls below 2% from the originally budgeted amount the Government may provide further funding assistance.
14. The protected action by the Applicant’s members would have the desired affect which was to force the Queensland Government to increase payment of tax payers to the Respondent. In this regard, although the Respondent operates other bus services in other regional centres in Queensland each contract for each region is a stand-alone operation which to continue must remain viable.
15. I have had the opportunity to read various affidavits from various members of the Applicant and the submissions, dated 6 March 2017, from the Applicant and wish to say as possible:
(i) I dispute in each case the brevity of the evidence as to the time taken to collect fares as the assessment does not take into account the true time spent in dealing with the public and the many issues that arise, especially given the large number of bus stops each deponent is required to stop at.
(ii)   I dispute the relevance of the copy of financial reports provided by the Applicant and referred to in the submissions of the Applicant. The Respondent is not the same Company as referred to in the copy of financial statements and the figures therefore do not relate to the operations of the Respondent.”[20]

The Respondent submitted that the Driver’s Handbook provides the expectations of bus drivers whilst they are involved in the collection of fares. The roles which were identified include:

Paragraph 1.4 relates to the issue of a cash float and cash tin and their operation. I note that in the event that float shortages have been identified the driver will be interviewed by a supervisor or manager to explain the reasons for such shortage.

Paragraph 2 relates to customer service and the obligation to assist our passengers which would include issues relating to the correct fares, give directions and timetable information. This is all given when fares are being paid. We have a high expectation that our drivers will proactively work with their passengers and any suggestion that the interaction between passengers when they pay their fares is limited in all occasions to a few seconds is incorrect.

Paragraph 2.2 specifically encourages our drivers to greet their passengers, our customers, ask how they can help and be courteous and polite at all times.

Paragraph 2.5 points out to our drivers that all passengers must be issued a ticket and all passengers must pay the full fare or where they are entitled to a concessional fare. The paragraph makes the point that before boarding the bus our drivers must clearly understand where the passenger is going so that the correct fare may be charged. In situations where a concession is sought our drivers must ensure that they carefully inspect the concession card to ensure that it is valid and that it applies to the passenger. The paragraph further outlines other issues that may apply to a passenger who is attempting to pay a fare which may include:
•          The non-payment of a fare
•          An under payment of the fare
•          Refusal to pay a fare at all
•          An aggressive passenger and what the driver should do in that circumstance
•          Pressing a fare evade button where installed or contacting the depot with the issue
•          The need to allow children to travel at all times and the need to report such a circumstance

Paragraph 2.6 refer to the major source of conflict which is with fares. The handbook refers to four principles that should be applied in those circumstances of conflict i.e. prevent, avoid defuse and defend. All of these solutions are time consuming for our drivers and of course do not occur when no fares are collected.

Paragraph 4.3 refers to the use of the radio when issue occur inside of the bus such as a fare evasion or fare dispute referred to in paragraph 6 (iv) above.

Paragraph 5 sets out the requirements for the end of the shift which includes obtaining a reconciliation ticket from the ticket machine, removing the cash box and paying in the takings from the shift. All not required during the protected action to bans collection of fares.

Paragraph 5.1 outlines the procedures for all drivers once they have finished their runs which includes counting and removing the float, attaching all cancelled tickets, travel coupons and vouchers to the pay in docket. It further requires the pay in docket and cancelled tickets to be placed in a designated area and the finds being placed in the safe chute. This process will usually take up to 15 minutes and drivers are allowed at least 15 minutes at the end of their shift to meet these requirements.[21]

The Respondent’s reports provided that on Thursday 16 February 2017, the service collected $17,995.00 in fares and on 23 February 2017, only $9,724.00 was collected. The Respondent submitted that this represents a 54.03% reduction in revenue. Out of the 80 employees rostered on Thursday 23 February, 44 employees did not collect fares.

The Respondent submitted the calculated 51% reduction is based upon the total operating expenses of the Marlin Coast Sunbus operation at $16,525,751.00 for the last financial year, with some $8,426,935.00 being collected in fares. The Respondent further submitted that the Applicant has simplistically and without any evidence calculated that the collection of fares would take up no more than 16% of the employees’ time during an average shift of 7.6 hours.

The Respondent submitted that the Applicant relies upon Regulation 3.21, which sets out a formula which can be applied to calculate the reduction, and is based upon an estimate of the hours it might take an employee to collect the fares against the total duration of the shift. The Respondent submitted, in response to the Applicant’s reliance on Regulation 3.21, that Regulation 3.21 should not be the relevant factor in calculating the proportional deduction, and that the Commission has an obligation under s.472(3) of the Act to take into account:

(a) “Whether the proportion specified in the notice give 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 of the circumstances of the case.”

The Respondent submitted that the Commission has previously considered the principles that apply to the implementation of s.472, as per Transport Workers Union v Department of Territory and Municipal Services (ACTION).[22] The Respondent submitted that the ACTION case is most relevant to this matter as it involved the Applicant and the Respondent, ACTION, a bus company that operates similar services to that of the Respondent, with similar contractual obligations to the Respondent.[23]

The Respondent submitted the decision in ACTION considered almost the same set of circumstances as occur in the current matter, in that both the Respondent and ACTION buses received particular funding arrangements from their respective Governments to fund their services. The Respondent submitted that in both cases, the fare box is heavily subsidised by additional Government funding and that the passenger who receives a free trip receives that benefit for the entirety of the trip, not just for a short period in which their fares would have otherwise been collected. The Respondent submitted that the bus service continues, despite the non-collection of the fares and ACTION had received consideration that the nature and extent of the proposed partial work ban goes well beyond just the proposed protected industrial action, therefore the Respondent submitted it is also entitled to receive this consideration in light of the similarities between the cases.

When determining the calculation of the reduction, which is outlined in the Decision in ACTION, Commissioner Deegan took into account the submission of the Respondent to the terms of the original memorandum of understanding to the Fair Work Act 2009 relating to the impacts of partial work bans when it was noted:

“This measure will provide employers with more discretion and flexibility on how to best manage the impact of the situation when action of this nature is taken. This may assist in resolving disputes more efficiently and may prevent the escalation of some disputes.”[24]

It is noted in the current bus operation undertaken by the Respondent, that (as argued by the Respondent) the Government provides a ‘top-up’ after receipt of funds from fare collection. In taking a similar approach to the ACTION case above, and taking account of the legislative context. The Respondent argued the ban on the collection of fares will likely impact on the entire community given that the Respondent is taxpayer funded and the lost revenue, due to the non-collection of fares, is likely to result in an additional government subsidy being required. Therefore, it was submitted the impact on the Respondent, will be greater than merely a loss of revenue, which it argued represents only a percentage of the total revenue collected by the Respondent (pre-paid fares representing a significant amount).

The Respondent refutes the approach of the Applicant (to the issue of considering fairness between the parties), in that they seek to link the entire Transit Australia Group’s accounts and activities across the entire Queensland eastern seaboard as a basis for determining the percentage reduction of wages for an employee of the Respondent in Cairns, Queensland.

The Respondent submitted the business known as ‘Transit Australia Pty Ltd T/A Marlin Coast Sunbus’ is a stand-alone cash generating business unit and is accounted for independently of the other cash generated units within Transit Australia Pty Ltd. It is also a separate and stand-alone business, which has its own bus service contracts with terms and conditions, which are dissimilar from other bus service contracts, which Transit Australia Pty Ltd holds with the Queensland Government. Furthermore, the operation of this bus service is not the only exclusive income producing source of the Transit Australia Group, which provides consultancy services, manufactures buses, and has property holdings.

It is the Respondent’s submission that the Applicant had not addressed the relevant provision, s.473(3)(a), which places an obligation upon the Commission to consider:

“Whether the proportion specified in the notice give under paragraph 471 (1) (c) was reasonable having regard to the nature and extent of the partial work ban to which the notice relates”

The Respondent submitted that the separate nature of the Cairns operation is the only relevant consideration which should be considered when calculating the proportionate wage reduction. The Respondent continues to dispute the relevance of any evidence of the totality of the Group’s business.

The Respondent submitted that the parties appear to be in agreement on the following: the actions of the employees not to collect fares on Thursday 23 February 2017 was protected action and constituted a partial work ban within the terms of section 470 of the Act. It submitted it was an appropriate response by the Respondent employer, to reduce the wages of employees that engaged in such protected action; and, that the notice provided by the Respondent relating to the reduction of wages, complied with section 471 of the Act.

The Respondent submitted that it is entitled to deduct 36.7% from the wages of employees who undertook partial work bans on 23 February 2017, as this deduction is reasonable in the circumstances of non-collection of fares, therefore the Respondent seeks an Order dismissing the Application, to reduce the deduction from the wages.

Consideration

The facts in this matter are not in dispute; however, what is disputed is the application of Regulation 3.21 and the manner in which the Commission should exercise its discretion provided in s.471 and s.472 of the Act. Regulation 3.21 provides that the employer, in working out the proportion of reduction of employee’s payments during the period of the work ban, is to estimate the time that an employee would spend performing the banned work during the day and the solution is the portion by which the employee’s payment will be reduced for a day.

Regulation 3.21 provides the steps for calculating the proportion of wages to the deducted. In applying Step 1 of that formula, the Respondent identified “the work that [the employees are] proposing to fail or refuse to perform” as being ‘fare collection’ and has notified each driver that their payment will be reduced by an amount equal to the amount of time that the driver fails to perform that work. The Respondent had provided in its notice, issued on 17 February 2017, that employees would incur a deduction of 51% (later amended to 36.7% due to further legal advice) to their wages, during the specified period, if they were to engage in the proposed industrial action.

The Respondent contended that the work that the employees are proposing to refuse to perform equates to 36.7%, and that their payments should be reduced by, a proportion equal to the amount of time the driver would spend on each shift performing that specific task. The Applicant had proposed that the amount that is to be deducted from the employee’s wages should be 16%. The Applicant submitted various affidavits that suggested the amount of time taken in the work of ‘fare collection’ varied between 2.41% - 6.5% of the bus drivers’ total shift. The Applicant submitted that the proportion of time of the shift for undertaking these duties was 16%.

In his decision in United Voice - Northern Territory Branch v Commissioner for Public Employment for the Northern Territory[25], Vice President Catanzariti stated:

“There are a limited number of authorities on the application of s. 472 of the Act. Despite this, however, it is clear that the application of s. 472 has been considered as requiring closer analysis than a perfunctory application of the “formula” set out in Regulation 3.21. The seminal decision with respect to the application of s. 472 is Transport Workers Union v Department of Territory and Municipal Services (ACTION), in which Commissioner Deegan said:
[33] ... When determining an application for an order to vary the proportion by which an employee’s payments are to be reduced, FWA is required to take into account ‘whether the proportion specified in the notice was reasonable… having regard to the nature and extent of the partial work ban…’ and also to take account of ‘fairness between the parties taking into consideration all the circumstances of the case’. If all that were to be considered, as was argued by the TWU, was whether the employer had properly estimated the time involved in physically performing the banned task, the matters to be taken into account by FWA would have little relevance, particularly the ‘nature’ of the ban and ‘fairness between the parties’ in light of ‘all the circumstances of the case’.
…
[35]     Clearly, s.472 of the Act gives a wide discretion to FWA to deal with disputes concerning the amount of reduction an employer proposes to make and the section does not require, or allow, FWA to determine such a dispute merely by applying the ‘formula’ set out in Regulation 3.21.
[36]     It is apparent from the terms of the Explanatory Memorandum that sections 470 and 471 were introduced to allow employers to make a judgment about the effect of a partial work ban and decide how to respond to the ban, that is whether to refuse to pay the employee at all for the period of the ban, refuse to accept the performance of any work by the employee or pay the employee proportionally for the work performed. Under the previous legislation the employer had no discretion in this regard and was required by the legislation to deduct at least four hours’ pay from any employee implementing protected action, no matter how minimal the effect of that action. According to the Explanatory Memorandum the new provisions might ‘assist in resolving disputes more efficiently and may prevent the escalation of some disputes’.
[37]     Under the provisions of the Division, the employer has the discretion to decide that a task that an employee proposes to ban is not so critical that it is preferable that the employee perform no work at all and receive no payment. In such a circumstance the employer can determine what proportion of the employee’s wage should be paid for the performance of the work not banned and notify the employee of the proposed reduction in payment. The employee can then determine whether to accept that proportion of payment which will be made or take some other form of protected action, such as performing no work at all. It is also open to an employee, if it is considered that the proportion by which the payment has been reduced is too high, to make an application such as the present one under s.472 of the Act and have FWA determine the amount by which the payment should be reduced.”[26]

The terms of the Explanatory Memorandum, as discussed by Commissioner Deegan above, sets out that sections 470 and 471 were introduced to allow employers to make a judgment about the effect of a partial work ban and decide how to respond to the ban.

It is noted as per the ACTION decision:
“[34] According to the Explanatory Memorandum which accompanied the Fair Work Bill 2008, the purpose of sections 471 and 472 of the Act is to provide employers with flexibility and discretion in managing partial work bans. While the Explanatory Memorandum also noted that the amount to be deducted “would not be damages suffered by the business, but will relate to the proportion of the employee‘s work not performed and his or her normal wages”9, I am nevertheless inclined to accept that “work” in this context is capable of meaning something more than just the physical task that is banned and that is the impact of that task on the “work” of the employee.
[35] Clearly, s.472 of the Act gives a wide discretion to FWA to deal with disputes concerning the amount of reduction an employer proposes to make and the section does not require, or allow, FWA to determine such a dispute merely by applying the “formula” set out in Regulation 3.21.”[27]

Section 472(3)(a) – whether the proportion specified in the notice was reasonable – with regard to nature and extent of the partial work ban to which the notice relates

Consideration must be given to whether the proportion specified in the notice provided by the Respondent on 17 February 2017 was reasonable, having regard to the nature and extent of the partial work ban to which the notice relates.

The Respondent relied on the affidavit of Mr Calabro to establish the percentage of time that employees undertook to complete tasks associated with the collection of fares, which was calculated (in the adjusted figure) at approximately 36.7% of the employee’s time on their shift (based on an average shift of 7.6 hours). Mr Calabro came to this conclusion taking into account the various associated obligations of bus drivers in the process of fare collection, as set out in the Driver’s Handbook.

In The Australian Institute of Marine and Power Engineers v Port of Brisbane Pty Ltd[28] Commissioner Simpson stated that associated tasks to the banned duties should be taken into account. He found that no deduction to the reduction proposed by the employer of 35% was to be granted. The case involved a proposed ban to employees undertaking repairs and maintenance to the machinery, specifically used for dredging. The Union sought a reduction in the amount proposed, by the Respondent, to be deducted from the employee’s pay that was to take part in the ban, from 35% to 4.16%. The Respondent submitted that the 35% deduction was based on a calculation of the tasks associated with the ban, and submitted that the Applicant’s calculation of a proportionate reduction of 4.16%, wholly ignored a range of tasks associated with the ban. Commissioner Simpson agreed with the Respondent’s submissions in that “the assessment of whether the proportionate reduction was reasonable having regard to the nature and extent of the partial work ban is an assessment which is undertaken prospectively at the time of issuing the notice rather than retrospectively after the partial work ban ceases”.[29] Commissioner dismissed the application, and maintained the 35% reduction.

The Respondent took into account all activities associated with fare collection. Mr Calabro referred to the Driver’s Handbook which sets out the various obligations of bus drivers. Mr Calabro suggested that the work surrounding the collection of fares includes cash tin and float maintenance and interacting with customers. The Respondent had proposed during cross examination to Mr Osuch (witness of the Applicant, in the Hearing on 16 March 2017), that the company allows 10 minutes before the start of the driving shift and 10 minutes at the end of the driving shift to undertake the associated tasks.[30] Mr Osuch responded stating that drivers are assigned a bus and check the vehicle within in the first 10 minutes of the day and the cash tin will be finalised at the end of the day. At the start of the day, the cash tin should still be ready to go in the morning with no changes.[31]

The Applicant submitted, the Respondent’s approach in reducing wages by the original 51% (in the notice issued via email on 21 February 2017), was to recoup lost revenue that is foregone due to the partial work ban. The Applicant submitted that this approach, taken by the Respondent, is identical to the way damages are assessed by the Courts.

The Applicant submitted that the appropriate result would be to vary the employer’s notice from 36.7% to a 16% deduction from the daily wages of employees, who took part in the partial work ban. The Applicant calculated the 16% deduction as follows:

“On average 150 tickets are issued or collected per 7.6 hour shift. Each action of issuing a ticket takes 30 seconds. 75 minutes of a 7.6 hour shift represents approximately 16% of the normal time of a bus driver over a 7.6 hour shift.”[32]

The Applicant submitted affidavits of drivers to provide the percentage of time spent on the collection of fares. The percentage figures, based on what the bus drivers had considered as time spent on fare collection duties during their regular shift, equated to 6.5%, 2.5%, 3.38%, and 2.41% for each driver. These figures to not accord with the Applicant’s final 16% figure. The Respondent had taken into account not only the act of collecting the fares from passengers, but also various obligations of the bus drivers in the process of fares collection, as set out in the Driver’s Handbook.

Section 472(3)(b) – fairness between the parties taking into consideration all the circumstances of the case

The Applicant submitted that previously there have been similar bans on collecting fares since 7 October 2016,[33] where the Applicant had notified the Respondent of proposed protected industrial action, including a ban on collecting fares that was to take effect on 13 or 14 October 2016. The Applicant had previously accepted a ‘without prejudice’ settlement of a prior similar dispute; with the Respondent of a 20.1% deduction. The Applicant submitted no party to a s.472 matter has achieved anything close to an arbitrated deduction of 51% (adjusted to 36.7%) (as per the table of outcomes included earlier at paragraph [21]). In the case most factually aligned to this matter, the ACTION case, Commissioner Deegan reduced a claim for a “2/3rds” deduction to 20.1%. The Applicant recognised that whilst there are different circumstances, which explain the above results, the overarching explanation of employers in these cases generally focused on compensation for lost revenue.

Lost earning capacity of the Respondent

The Applicant provided the 2015/16 financial return for the Respondent, during that period, it had received $174 039 191 in revenue. The Applicant stated that assuming the Respondent operated every day (excluding Christmas Day and Easter Friday) this amounts to a daily average of $479,466. Taking the alleged lost revenue in paragraph 5,[34] there then has been a 2.38% loss of daily revenue across the operations of the business.

The Respondent reported that on Thursday 16 February 2017, the service collected some $17,995.00 in fares. On 23 February 2017, only $9,724.00 was collected. This represents a 54.03% reduction in revenue to the Respondent. Out of 80 employees rostered on Thursday 23 February 44 employees did not collect fares. The Respondent submitted the calculated 51% reduction is based upon the total operating expenses of the Marlin Coast Sunbus operation at $16,525,751.00 for the last financial year, with some $8,426,935.00 being collected in fares.

However, in this regard VP Catanzariti in his decision[35] noted:

“[22] … The reduction in payments cannot simply be arrived at by estimating the potential cost impact of the industrial action and allocating this cost to the employees undertaking industrial action.”

Conclusion

In assessing the appropriate reduction it is necessary to consider the application of s472(3), Regulation 3.21 and all of the circumstances of the case.

The ACTION case is closely aligned to the current case, as ACTION is a bus company which operates similar services to that of the Respondent with somewhat similar contractual obligations to the Respondent, with the drivers engaging in similar work and a similar partial work ban. In the ACTION case it was determined that:

“In exercising the discretion available to me under s.472 of the Act I have taken into account all the circumstances of the case which have been brought to my attention by the parties. It is my view that fairness between the parties requires me to determine a reduction in payments that more reasonably represents the “extent” of the partial work ban proposed.

I have taken into account that:

· a bus service will continue to be provided by the drivers taking part in the industrial action;
· a large part of the cost of operating the bus service is funded by government subsidy and not the collection of fare revenue.
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%.
An order varying, to 20.1%, the proportion by which each employee’s payments are to be reduced is attached to this decision.”[36]

It is recognised that in determining the percentage of reduction that is to be applied to the employee’s wages, requires more than a consideration of section 472 and the formula in Regulation 3.21. It is necessary to consider all of the circumstances and take into account whether the proportion specified in the notice is reasonable, having regard to the nature and extent of the partial work ban, to which the notice relates. In addition, the fairness between the Parties must take into account the consideration of all of the circumstances of the case. On the last occasion of the notification of a similar partial work ban the employer notified a 20.1% work ban, as determined in ACTION, the union did not object to this.

Section 472(3)(a) – whether the proportion specified in the notice was reasonable – with regard to nature and extent of the partial work ban to which the notice relates

It is apparent that the Respondent’s initial methodology adopted, in assessing the 51% wage reduction provided an inflated result for the wage reduction. The Respondent provided, upon further consideration and legal advice on the ACTION case, that the reduction should be reduced to 36.7%. This figure was reached in an assessment made by Mr Calabro. Mr Calabro considered the tasks associated with fare collection, as provided in the Driver’s Handbook. Mr Calabro relied on the Driver’s Handbook, issued to employees of the Respondent, to consider the various obligations of a Bus Driver, in the process of fare collection. Such associated tasks included time spent in dispensing tickets, dealing with passengers and reconciliation of the cash box (which would not occur if no fares are collected). Mr Calabro’s calculations were based on the duties in the Drivers Handbook, which outlines the basis of their duties associated with fare collection.

As previously referred to in consideration of the appropriate wage reduction a consideration of the associated duties should also be taken into account. Such approach was used in The Australian Institute of Marine and Power Engineers v Port of Brisbane Pty Ltd[37] where Commissioner Simpson agreed with the Respondent’s submissions, in that a deduction is to be based on a calculation made prior to the ban of the tasks that are associated with the work ban, as below:

“the assessment of whether the proportionate reduction was reasonable having regards to the nature and extent of the partial work ban is an assessment which is undertaken prospectively at the time of issuing the notice rather than retrospectively after the partial work ban ceases”.[38]

The Unions approach only considered time taken in fare collection. The Applicant’s 16% did not reconcile with the estimates of bus drivers in time taken on fare collection. The individual driver’s evidence identified of the time associated with the collection of fares, reflected that ticket collection duties consumed a maximum of 6.5% of a bus drivers’ total shift. These figures did not include the associated tasks set out in the Driver’s Handbook.

The Applicant submitted its position is that the collection of fares by bus drivers would account to no more than ten minutes of a driver’s time on an average shift.[39] The Applicant provided that the estimation was supported by evidence provided in the affidavits as referred to previously. Further to this, the Applicant submitted that this is the correct approach as the Commission’s assessment by s.472(3); is not a jurisdiction; that allows the assessment and award of something akin to damages at law. That is, it is a discretionary decision that requires the matters be considered under s.472(3)(a), s.472(3)(b) and Regulation 3.21.

Having regard to the nature and extent of the ban, it is considered that the proportion specified by the Respondent in the notice, is not reasonable on the evidence and a comparative assessment of the related case authorities. The Applicant’s submission that the proportion by which the payment should be reduced in light of the work of ‘fare collection’ which would only account for a maximum of 6.5% of a bus drivers’ total shift is also not accepted. 20.1% has previously been accepted by the Union, as was deemed appropriate in the analogous ACTION case. The proposed percentage by the Applicant, does not take account of the time taken on ancillary duties, to fare collection. The greater percentage figure of 20.1% awarded in the ACTION case, took into account all of the relevant duties.

The Applicant’s evidence included conservative, percentage, time-based calculations, arising from estimates, in the evidence, of the bus drivers of the time taken in the banned duties of fare collection as part of their shift. These percentages as qualified did not include an allowance for other associated duties of fare collection. As stated, in similar circumstances of banned duties previously, the Union has on a ‘without prejudice’ basis, accepted a 20.1% reduction in wages. Similarly, it can be stated that whilst the Respondent, like the Applicant, set out the manner in which they approached their nominated percentage of 36.7%, clear calculations underlying the percentage were also not included. However the percentage of 36.7%, when taken in comparison to the time taken estimates to undertake the duties (as providing in evidence by the bus drivers, even though such did not include associated duties), is considered to be excessive.

Taking into account the assessment of the specific matters, section 472(3)(a) requires an assessment of whether the proportion specified in the notice was reasonable, having regard to the nature and extent of the partial work ban to which the notice relates. The Respondent’s amended percentage of 36.7% is considered, not to reconcile with the time associated with the withdrawn duties. I do not consider that the Respondent’s figure of approximately 36.7% to be a reasonable estimation of the time taken by employees on the shift, in undertaking duties associated with the collection of fares. The Respondent’s percentage of approximately 36.7% in a 480 minute shift, would equate to some 176 minutes engaged in the taking of fares. That is more than a third of the time of drivers engaged in the collection fare activities. Furthermore, the calculation is not appropriate as a revenue based reduction.

The Applicant’s approach considers only the time taken in the collection of fares. The Respondent’s approach in calculating their percentage of 36.7% (whilst proportionally significant in terms of the time taken), includes the associated tasks to fare collection as set out in the Drivers Handbook. This is a reasonable approach. It is considered that some ancillary tasks to fare collection should be included in the assessment of the appropriate percentage. For example it is considered reasonable that passenger inquiries form part of the fare collection transaction, thus adding to the time taken in these duties. The Applicant in formulating the 16% calculation has not included any additional duties apart from fare collection (it must be noted there was no evidence that drivers were refusing to undertake the associated tasks). Accordingly, a greater percentage than 16% to take into account the associated duties in the calculation, would be reasonable in the circumstances on the prior occasion of such a ban, where it was accepted that 20.1% was an appropriate reduction.

Section 472(3)(b) – fairness between the parties taking into consideration all the circumstances of the case

Further to section 472(3)(a), section 472(3)(b) is to be assessed. As set out above, the fairness between the parties is to be taken into account. In this regard, the Applicant has argued that the impact of the industrial action on the financial status of the holding company should also be taken into account. The relatively low wages of the employees in question are raised as an issue, also to be considered. The wages have been considered.

The Applicant seeks the Commission to take into account, in terms of fairness between the parties, a consideration of the financial position of the parent company, not just the Employer subject to the proposed Agreement. It was proposed, that the consideration of fairness should not be just of the impact of the protected industrial action on Marlin Coast Sunbus (not as a separate legal entity) but as a registered business name forming part of the overall corporation the ‘Transit Australia Pty Ltd group’. This approach is novel, and does not take into account the actual employer that is being engaged with to reach an Agreement to cover the relevant employees of Transit Australia Pty Ltd trading is as Marlin Coast Sunbus, only; rather than the parent company Transit Australia Pty Ltd. I do not accept that the impact on the holding company is a relevant consideration, in terms of the structure and scheme of the legislation in regard to Agreement making. The immediate company to the negotiations is the relevant entity. That is, where a protected action ballot Order has been made for employees employed by Transit Australia Pty Ltd trading as Marlin Coast Sunbus, only not employees of the parent company; the relevant entity is that with which the Enterprise Agreement is sought (as the employer of the employees to be covered by the Agreement) and those being the employees that pursued the protected industrial action against the employer. It is considered that the approach to consider legal entities outside the parties to the Agreement, is not in accordance with the statutory scheme.

This approach of looking to the parent company, in considering the fairness between the parties (in setting the appropriate wage reduction) is rejected. It is the proximate relationship of the parties, engaged in the bargaining for the proposed Agreement, and those immediately impacted by the taking and being subject to, the protected industrial action that is relevant to setting the proportion of wage reduction. In the current circumstances (these are the employer and employees of Marlin Coast Sunbus) and not the overall parent company or all of the employees of that parent company.

It may be relevant to consider other employers where an Agreement is made pursuant to section 172(2), that is, it involves two or more employers, that are single interest employers. The statutory scheme relevant to that type of Agreement, may necessarily involve a consideration of more than one employer, being those employers subject to the proposed Agreement and therefore subject to the protected industrial action, of all of those employees to be covered by the Agreement, covering more than one employer. This is however, separate to the current circumstances.

Regulation 3.21 of the Fair Work Regulations 2009

The formula in Regulation 3.2.1 must also be considered in the setting of any wage reduction. In terms of Step one of the formula; identification of the work ban that the bus drivers have taken in terms of the protected industrial action; is the refusal of the collection of fares. It is reasonable (as previously stated) to include in this work an accommodation for some of the associated duties, such as time taken with passenger inquiries that are associated with fare sales. Thus increasing the estimation of time spent on fare collection duties. Taking these figures into account in terms of Steps two and three (of Regulation 3.21), provides a calculation of 16% on the Applicant’s figures (but this only includes fare collection, not associated duties) in comparison to 36.7% as noted on the Respondent’s revenue based figures.

The approach used in ACTION refers to circumstances, the most analogous to the current circumstances, out of all of the case authorities referred to. The concluded percentage, in that case was 20.1%, as Commissioner Deegan stated:

“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%.”

The same cost figures have not been provided in the current case to undertake the similar calculation for the current matter. The case of ACTION however, does have some relevance here, as the circumstances of the nature of the business and the undertaking is the most similar. In the ACTION case, the ban was in similar terms a ban on the collection of fares by bus drivers. In addition the resulting figure in the ACTION case of 20.1%, was also the figure accepted on a without prejudice basis, in relation to a prior, similar work ban by the Applicant in the current case.

It is noted that a percentage figure of 20.1%, greater than the 16% argued by the Applicant currently, would account for apportioning time spent on the associated fare collection duties (as per the approach of Commissioner Simpson in The Australian Institute of Marine and Power Engineers v Port of Brisbane Pty Ltd)[40] rather than just fare collection as assessed by the Applicant, in arriving at 16%. Accordingly the 20.1% provides a reasonable adjustment for this, whilst not moving to a portion of time that does not provide a realistic proportion of the time taken on shift for these duties.

Accordingly the current approach has taken into account the matters to be addressed in section 472; the proportion specified in the notice as to the nature and extent of the partial work ban; fairness between the parties; all of the circumstances of the case; the associated case authorities and the formula as set out in Regulation 3.21. This approach accords with that as previously noted by Vice President Catanzariti[41]:

“There are a limited number of authorities on the application of s. 472 of the Act. Despite this, however, it is clear that the application of s. 472 has been considered as requiring closer analysis than a perfunctory application of the “formula” set out in Regulation 3.21.”

This is a discretionary decision, in relation to the relevant statutory provisions. It is noted however, that it is not a damages jurisdiction and therefore such approach to the calculations has not been followed.

For the aforementioned reasons, I consider that the appropriate reduction to the wages associated with the period of protected industrial action is 20.1%.

A separate Order will issue to this decision, in relation to the terms set out above.

COMMISSIONER

Appearances:

L. Norris, Industrial Officer for the TWU

I. MacDonald, National Industrial Relations Manager for the Australian Public Transport Industrial Association

Hearing details:

2017:
Brisbane
Thursday, 16 March 2017 and Thursday, 4 May 2017

[1] Form F2 filed by the Applicant on 22 February 2017 section 2.1

[2] Applicant’s submissions dated 6 March 2017 at 8

[3] Respondent’s submissions dated 10 March 2017 at 4

[4] Form F39 submitted by Applicant dated 22 February 2017

[5] (1880) 5 App Cas 25 at 39

[6] [2010] FWA 4558 at [33]

[7] Affidavit of Keith Goldie dated 2 March 2017 at [8] – [12]

[8] Affidavit of Neil Graham Lennon dated March 2017 at [7] – [12]

[9] Affidavit of Gregory Russell Osuch dated 3 March 2017 at [6] – [10]

[10] Affidavit of Stephen Moore dated March 2017 at [7] – [12]

[11] Affidavit of Russel Vieritz dated 3 March 2017 at [6] – [12]

[12] Applicant’s Submissions dated 6 March 2017 at [23]

[13] Applicant’s Submissions dated 6 March 2017 at [19]

[14] Applicant’s Submissions dated 6 March 2017 at [19]

[15] Supplementary submissions of the Applicant dated 24 March 2017 at [1]

[16] TWU v Department of Territory and Municiple Services (ACTION)[2010] FWA 4558 at [50]

[17] Submission of the Respondent dated 10 March 2017 at 5

[18] Affidavit of John R Calabro dated 10 March 2017 at Annexure B

[19] Ibid

[20] Affidavit of John R Calabro dated 10 March 2017 at [10] – [15]

[21] Affidavit of John R Calabro dated 10 March 2017 at [6]

[22] [2010] FWA 4558

[23] TWU v Department of Territory and Municiple Services (ACTION)[2010] FWA 4558 at [33] – [37]

[24] TWU v Department of Territory and Municiple Services (ACTION)[2010] FWA 4558 at [23]

[25] [2013] FWC 6451

[26] TWU v Department of Territory and Municiple Services (ACTION)[2010] FWA 4558 at [33] – [37]

[27] Ibid at [34] – [35]

[28] [2011] FWA 4653

[29] The Australian Institue of Marine and Power Engineers v Port of Brisbane Pty Ltd[2011] FWA 4653 at [67]

[30] Transcript of proceedings 16 March 2017 at PN397

[31] Ibid

[32] Form F39 submitted by Applicant dated 22 February 2017

[33] Affidavit of Russel Vieritz dated 3 March 2017

[34] Respondent’s submissions dated 23 February 2017

[35] United Voice - Northern Territory Branch v Commissioner for Public Employment for the Northern Territory[2014] FWC 1185

[36] TWU v Department of Territory and Municiple Services (ACTION)[2010] FWA 4558 at [48] – [51]

[37] [2011] FWA 4653

[38] The Australian Institue of Marine and Power Engineers v Port of Brisbane Pty Ltd[2011] FWA 4653 at [67]

[39] Affidavit of Gregory Russell Osuch dated 2 March 2017

[40] [2011] FWA 4653

[41] United Voice - Northern Territory Branch v Commissioner for Public Employment for the Northern Territory [2013] FWC 6451 at [18]

Printed by authority of the Commonwealth Government Printer

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.