SENIOR DEPUTY PRESIDENT
| [2018] FWCFB 3133 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
Four yearly review of modern awards
(AM2016/32)
ROAD TRANSPORT AND DISTRIBUTION AWARD
[MA000038]
Road transport industry | |
SENIOR DEPUTY PRESIDENT HAMBERGER |
SYDNEY, 31 MAY 2018 |
Four yearly review of modern awards – variation to the Road Transport and Distribution Award 2010 [MA000038] to extend award coverage to the vehicle relocation industry – whether any further modifications to the Road Transport Award should be made to accommodate the particular features of vehicle relocation work (including any appropriate transitional provisions) – two-year transitional period to be introduced.
[1] On 6 July 2017, we issued our decision 1 in relation to proposed substantive variations to the Road Transport and Distribution Award 20102 (Road Transport Award) and the Road Transport (Long Distance Operations) Award 20103 (Long Distance Award). One of the variations we decided to make was to extend the coverage of the Road Transport Award to include employers in the vehicle relocation industry.4 We indicated in that decision that a conference would be convened to discuss whether the Road Transport Award should be further varied to accommodate the particular features of vehicle relocation work, including any appropriate transitional provisions (the vehicle relocation industry issue).5
[2] Senior Deputy President Hamberger convened that conference on 30 August 2017. No consensus was reached at the conference, but the parties undertook to continue discussions with one another. It subsequently became apparent that the parties would not reach a consent position on any further variations. Accordingly, we listed the matter for a further hearing and issued directions for the filing of evidence and submissions.
The further hearing
[3] We heard the evidence relating to the vehicle relocation industry issue on 19 and 20 March 2018, and the parties’ submissions on the issue on 13 April 2018. The following parties appeared at those further hearings:
• Truck Moves Australia Pty Ltd (Truck Moves), Quick Shift Vehicle Relocations Pty Ltd and Vehicle Express Pty Ltd (together Truck Moves and others);
• the Transport Workers’ Union of Australia (TWU); and
• the Australian Road Transport Industrial Organisation (ARTIO).
[4] Truck Moves and others continued to rely on the witness statements of Don Clayton, 6 John Bradac7 and Matthew Whitnall8 marked in earlier proceedings, and also tendered:
• a further witness statement of Matthew Whitnall dated 24 November 2017; 9
• a bundle of documents including newspaper advertisements and photographs of vehicles moved by Truck Moves. 14
[5] The TWU tendered:
• a copy of the NSW Roads & Maritime Services Heavy Vehicle Driver Handbook; 15
[6] ARTIO tendered a photograph of a Truck Moves dual-cab vehicle with cages on the back. 22
[7] All witnesses were cross-examined.
Truck Moves and others’ draft determination
[8] Truck Moves and others filed a draft determination (the Truck Moves determination) as an annexure to Mr Whitnall’s further witness statement. 23 On 13 April 2018, they handed up a revised draft determination.
[9] The revised draft determination proposes the insertion of a schedule to the Road Transport Award, with a commencement date of the first full pay period on or after 1 July 2018. It specified a minimum hourly wage rate of $18.83 for all full-time adult employees employed to drive unladen vehicles in the vehicle relocation industry. We note that this is below the current lowest hourly rate in the Road Transport Award of $19.37 for a grade 1 transport worker. 24 This classification covers employees such as vehicle washers and furniture removers’ assistants, and foot and bicycle couriers. The lowest grade at which a transport worker driving a vehicle can be classified is grade 2, which applies to tow motor drivers and drivers of rigid vehicles (including a motor cycle) not exceeding 4.5 tonnes gross vehicle mass (GVM).25 Truck Moves and others propose that the new minimum wage rate be phased in over four years.
[10] The revised draft determination proposes to exclude or modify a number of provisions of the Road Transport Award, including cls 12.5(c) (casual loading), 19 (higher duties), and 25 (the provision of regular start times).
[11] The revised draft determination provides for drivers engaged on a long distance trip to be paid a per kilometre rate. It also provides for a maximum 10 ordinary hours a day for a driver in the vehicle relocation industry (12 on long distance trips), compared to the current maximum of eight hours under the Road Transport Award, and extension of ordinary hours to Saturday and Sunday, which can only be done by agreement under the current Road Transport Award.
The evidence
[12] Mr Whitnall, the owner and director of Truck Moves, gave evidence that Truck Moves is predominantly engaged in the business of commercial vehicle ferrying of brand new, pre-registration and partially built vehicles from importer to wholesaler. The client’s vehicles are driven locally and interstate, depending on the needs of the client. They are prohibited from carrying any load or freight as they are predominantly classified as unregistered vehicles, meaning they are as yet not finished for sale. 26
[13] Often, the vehicle being relocated is a truck (or cab chassis), but the trucks can be of varying make and size, from rigid vehicles with varying GVM, to two-axle or three-axle rigid vehicles, to rigid vehicles with four or more axles and larger trucks. 27 Truck Moves also relocates standard passenger cars, for example, between yards or to auctions, as well as vehicles like fire engines, garbage collection vehicles, army vehicles, cement mixers and buses.28
[14] According to Mr Whitnall, Truck Moves only engages drivers as casuals. It employed about 93 casual drivers when he made his initial statement in March 2017. Truck Moves pays employees slightly above the National Minimum Wage. 29 Older drivers and those with pre-existing injuries are attracted to Truck Moves because there is no manual labour involved.30
[15] Mr Whitnall said that ‘standard hours’ at Truck Moves are usually eight hours a day and that while drivers are expected to work somewhere in the vicinity of eight hours each day, they might work up to 10 hours. 31 Mr Whitnall confirmed that Truck Moves was seeking a change to the ordinary hours provision to allow more than eight hours of ordinary work on any day, being either 10 or 12 hours (12 hours on long distance trips).32 When asked how the Road Transport Award would operate if the company proposal was accepted in regard to the number of ordinary hours that could be worked on a weekly basis, and whether there would be a weekly maximum, he replied that he did not know.33 Mr Whitnall also said that the vehicle relocation industry should be exempt from cl 25 of the Road Transport Award, which requires the employer to set start times, as ‘… the nature of the work is ad hoc. It’s too hard to plan.’34
[16] Mr Whitnall gave evidence that Truck Moves has long-term contracts with a number of clients. For example, on June 2016, Truck Moves signed a significant contract with one of its main clients for a three-year term, with the option for the client to extend the agreement by two one-year terms. 35 Another contract is in operation until mid-2019.36 Mr Whitnall stated that all business modelling and financing of Truck Moves has been based on the business being award-free.37 He asserted that the application of the Road Transport Award would place these contracts and the business of Truck Moves at risk.38 Mr Bradac, Truck Moves’ General Manager, claimed in his confidential witness statement that Truck Moves would experience significant increases in wage costs if the Road Transport Award applied without further variation. The TWU submits that in cross-examination, Mr Bradac made various concessions as to the assumptions made in estimating the cost impact on Truck Moves (for instance, assuming that drivers always worked 12-hour shifts, when the evidence is that they usually work eight hours a day), such that the increase in costs postulated was likely to be far less in reality.39
[17] Mr Whitnall gave evidence about the basis for settling on $18.83 as the minimum hourly wage rate Truck Moves sought in its draft determination. At first, Mr Whitnall said that ‘it came from somewhere between what we currently pay and more than what we currently pay and something that’s moving towards what we anticipate we will have to’. 40 He then withdrew that answer and stated that he ‘made it up’.41 He agreed with the proposition put to him that he made it up at that level, because he thought that he would have to pay a little bit more than $18.29 an hour (the current National Minimum Wage), but wanted to pay as little as possible.42 When asked if he looked at the rates in the Road Transport Award when he came up with the $18.83 figure, he replied ‘not really’.43 Truck Moves currently pays $22.90 per hour. This is based on the National Minimum Wage plus a 25% casual loading, which equals $22.86 per hour, which Truck Moves has then rounded up to $22.90.44
[18] Mr Bradac gave evidence that the work performed by drivers in the freight industry varies from the work performed by drivers employed by his firm (who drive unregistered and unladen vehicles). Drivers in the freight industry are required to undertake significant training in order to ensure compliance with the Heavy Vehicle National Law and Heavy Vehicle Regulations, occupational health and safety legislation and environmental laws. Freight drivers are typically trained in relation to such matters as load restraint, axle and weight distribution, loading and unloading, dangerous goods training, training in fuel and refuelling and fuel spillage and fatigue management and safe driving distances. 45
[19] During cross-examination, Mr Bradac agreed that the type of training that a particular driver completes depends upon the type of work they undertake, the type of vehicle they are involved in and the type of freight, if any, that they are carrying. 46
[20] Mr Bradac said that before a driver starts driving a vehicle carrying goods, there are a number of tasks and responsibilities that the driver must perform and satisfy, ranging from checking the vehicle, having the vehicle loaded and ensuring the load is secured and safe. 47
[21] Mr Bradac added that once a freight driver is on the road, there are other tasks that he or she would need to perform, including choosing an appropriate route to take depending on the weight, size and dangerous goods restrictions, checking load restraints periodically to ensure the safety of goods and the public, and using different skill sets based on the goods being carried (e.g. where a truck is carrying liquids in a tank, the driver would need to drive more slowly to ensure the safe transport of the vehicle and goods). 48 Other tasks such as organising the unloading of the truck are performed once a freight driver is at the delivery site.49
[22] According to Mr Bradac, drivers working for Truck Moves simply drive the vehicle from one location to another. They do not carry any goods and so their responsibilities and obligations are less. They therefore do not need to undergo some of the training required by drivers that drive vehicles carrying freight. 50 He did, however, concede during cross-examination that the Heavy Vehicle National Law applies to Truck Moves’ business and that it trains its employees in respect of their obligations under that law.51 He also agreed that Truck Moves employees receive training relating to workplace health and safety and relevant environmental laws.52
[23] Clause 19 of the Road Transport Award provides that where an employee is required to perform two or more grades of work on any one day the employee is to be paid the minimum wage for the highest grade for the whole day Truck Moves seek to be exempted from this clause. Truck Moves drivers drive varying types of vehicles – up to six classes of vehicles in one day, according to Mr Whitnall. 53 When the vehicle is delivered to its destination, the Truck Moves driver will then leave that vehicle, and return in a different vehicle (e.g. a taxi, train or aeroplane), not performing any driving work.54 Up to 50 per cent of the time for which an employee of Truck Moves is engaged may be spent not driving at all.55 However, Mr Whitnall also conceded that Truck Moves was able to control and direct which driver did which particular job.56
[24] Mr Mealin gave evidence that he had worked for Truck Moves for three years, commencing in March 2012. 57 He described the work he had done while at Truck Moves. He said that he drove vehicles of various makes, models, and sizes with varying GVM. However, for the majority of the time, he drove prime movers completing long distance operations interstate.58
[25] Mr Mealin denied that his role as a driver simply involved driving a truck from one location to another. He said that his duties also included a number of non-driving tasks such as vehicle checks, refuelling, paperwork, placing of trade plates on to vehicles, hitching trailers and occasionally tying down loads. 59 He also described the work he had done for other companies in the vehicle relocation industry.60 He agreed during cross-examination that the vast majority of the vehicles he drove had no load.61
[26] Mr Mealin said that he often had to communicate with the customers to whom he was delivering a vehicle. They would ask him about the vehicle, and he would need to notify them if the vehicle had a fault. 62 He said that drivers in the vehicle relocation industry needed more than basic training, as they were still driving heavy vehicles.63 He needed to comply with the Heavy Vehicle National Law, workplace health and safety laws and environmental laws.64
[27] Mr Mealin said that he needed to have knowledge and experience to get into different trucks and be able to work them appropriately, as every vehicle has different alarms and switches and there is a certain driving expertise that must be applied. ‘Not every truck’s the same, every truck has different systems.’ 65
[28] Mr Mealin agreed during cross-examination that the tasks involved in driving a cab chassis from one location to another are significantly less complicated than driving a fully loaded semi-trailer. 66 However, he said that he also drove a range of articulated vehicles for Truck Moves.67
[29] Mr DeClase gave evidence about his former role as HR Manager for PrixCar Services Pty Ltd (PrixCar). While in that role (as well as for a short period afterwards while he was a consultant) he negotiated an enterprise agreement with the TWU. His evidence was that Prixcar established a transport division in 2012 when it acquired Toll Auto Logistics. The transport division picks up vehicles from ports, delivers them to PrixCar’s Vehicle Processing Centres and then delivers them to various types of customers, including manufacturers and dealerships. 68
[30] Mr DeClase described how PrixCar employees, in addition to transporting vehicles on the back of truck/car carriers, also drive the cab chassis of some trucks with trade plates attached. 69
[31] According to Mr DeClase, under the enterprise agreement, drivers employed by PrixCar are paid according to the size of the truck they are driving, whether it is a loaded truck/car carrier or just the cab chassis itself. If the driver is at a certain grade, ordinarily driving a certain size of truck, then they are paid the same rate when driving the cab chassis. 70
[32] During his cross-examination, Mr DeClase agreed that all PrixCar’s drivers were allocated a particular grade because the majority of the work they did was transporting cars and/or trucks on a trailer. 71 He also agreed that drivers carrying cars or trucks would have significantly more obligations and responsibilities than a driver who simply jumped into a cab chassis off the wharf and drove it 12 kilometres to a facility.72
[33] Mr DeClase said that the main activity in which PrixCar employees are involved is the driving task itself. Accordingly, that is what it takes into account when determining how that employee ought to be paid. 73
[34] Mr DeClase noted that drivers doing vehicle relocation work need experience to be able to drive a wide variety of different vehicles, without needing specialised training on that vehicle. 74 He said that the new cab chassis from different manufacturers have different configurations in relation to starting, driving, parking, using the gearbox, and instrument panels.
‘This all requires the driver to be trained in using this particular piece of equipment. With changing technology and sophisticated systems, drivers are constantly learning & being trained in how to operate these new pieces of equipment.’ 75
[35] Mr DeClase said that loading and unloading is only one part of vehicle movement, and should not be addressed as the most significant or even a key part of driver duties. 76 He also said that all drivers are responsible for many factors, including road safety, safe driving, legislative and regulatory compliance including fatigue management, completion of paperwork and various other activities.77
Consideration
[36] As we noted in our earlier decision, the legislative context to the 4-yearly award review process was exhaustively discussed in the Penalty Rates Case. 78 We intend to continue to follow those principles.
[37] In our earlier decision, we said the following:
‘We agree with the TWU’s submission that the exclusion of drivers in the vehicle relocation industry from any modern award is anomalous. This situation is inconsistent with the requirement to ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions. We also agree that the appropriate modern award to cover the employees in question is the Road Transport Award. However, we do consider that there is an arguable case that some of the provisions of the Road Transport Award should be modified in their application to this group of employees, having regard to the particular features of their work. There may also be a case for some transitional provisions to apply in extending the coverage of the Road Transport Award to the vehicle relocation industry, given that existing contracts would have been entered into on the basis of the current arrangements.’ 79
[38] Having considered all the evidence, we are not persuaded by Truck Moves and others’ submission that the work value of the employees’ roles in the vehicle relocation industry is sufficiently different from that of roles in the road transport industry more generally to justify introducing a separate minimum wage to the Road Transport Award. In particular, it is clear that the proposed single hourly rate of pay of $18.83 for workers in the vehicle relocation industry bears no meaningful relationship to the existing classification structure in the Road Transport Award. It would, for example, involve truck drivers being paid significantly less than employees engaged to wash vehicles or deliver packages on foot or by bicycle. Mr Whitnall’s evidence was that the rate proposed was ‘made up’, with little or no consideration of its relationship with existing award rates and to secure the lowest payment possible.
[39] There are clearly some differences between the work performed by truck drivers in the vehicle relocation industry and that performed by drivers who drive trucks loaded with freight. In particular, there are some tasks that the latter often perform that the former do not. On the other hand, the evidence discloses that drivers in the vehicle relocation industry are often required to drive many different types of vehicles, and that poses its own challenges. The Road Transport Award currently covers drivers performing a wide range of tasks and driving a wide range of vehicles. We do not consider that Truck Moves and others have established a sufficiently strong case to depart from the general principle underlying the classification structure and associated wage rates in the Road Transport Award, namely, that rates of pay are set by reference to the type and size of vehicle operated by the driver. Nor do we accept that there will be any particular difficulty in applying the classifications in Schedule C of the Road Transport Award to the business of Truck Moves and others.
[40] As noted previously, the draft determination proposed by Truck Moves and others would increase the ordinary hours of work from eight hours on any day to 10 hours, or 12 hours for long distance work. We are not satisfied that a sufficiently strong case has been made out to justify altering the hours of work provisions in this way for drivers in the vehicle relocation industry. The evidence of Truck Moves’ own witness, Mr Whitnall, was that the usual working hours of its drivers are eight hours a day. There is no basis for finding that the way the vehicle relocation industry operates justifies a longer span of hours than applies to other drivers under the Road Transport Award. Nor do we think there is any evidence persuasive enough to exempt employers in the vehicle relocation industry from the requirement to set regular starting times for employees.
[41] We consider that cl 19 of the Road Transport Award, which provides that where an employee performs work in two or more grades on any one day, the employee is to be paid at least the minimum wage for the highest grade, should apply to drivers in the vehicle relocation industry in the same way that it applies to other drivers under the award. The clause is specifically designed to deal with the situation that Truck Moves claims applies to its drivers – namely, that they may drive more than one type of vehicle (that would each attract a different pay rate) during a day. In any case, the company is able to direct which driver does a particular job.
[42] The Truck Moves draft determination includes specific provisions for long distance trips. The evidence is that a small proportion of the work carried out in the vehicle relocation industry involves interstate operations. Such work would not be covered by the Long Distance Award because of the definitions in that award. Truck Moves proposes the inclusion of a per kilometre rate for such trips into the Road Transport Award. The insertion of a cents per kilometre rate into the Road Transport Award would be a major step – one which we do not think is justified. Truck Moves is currently required to pay its employees on an hourly basis and has not made out a case why this should not continue.
[43] In summary, therefore, we will not change the way the provisions of the Road Transport Award apply to employees in the vehicle relocation industry.
[44] We are, however, persuaded that the rates of pay provided in the Road Transport Award should be phased in over a period of time. Truck Moves have sought a four-year transitional period. We have considered the evidence of Truck Moves on the claimed financial impact the application of the Road Transport Award will have on its business. We acknowledge that there will be some increase in costs as a result of the extension of the application of the Road Transport Award, given that Truck Moves currently pays very close to the National Minimum Wage, and we also accept that the vehicle relocation industry had previously been award-free for a long time. However, we also note that Truck Moves and others have been on notice for some time that the Road Transport Award would be covering the vehicle relocation industry. Further, we place little weight on the evidence that was provided as to the claimed cost impact, as we are satisfied it significantly overstated its quantum. On balance, we think it is appropriate to provide for a two-year transitional period.
[45] The Road Transport Award should apply to employees in the vehicle relocation industry from 1 July 2018. However, the rates should initially be set at the National Minimum Wage plus one-third of the difference between the National Minimum Wage and the applicable award rate. From 1 July 2019, this should increase to the National Minimum Wage plus two-thirds of that difference. The full rates should apply from 1 July 2020.
Conclusion and next steps
[46] We issue a draft determination concurrently with this decision. We will give interested parties two weeks from the date of this decision to comment on the draft determination.
[47] The only other variation to the Road Transport Award that will be made as part of these proceedings that affects the vehicle relocation industry is the change to the coverage provisions already described in our earlier decision, extending the award to that industry.
SENIOR DEPUTY PRESIDENT
Appearances:
M Baroni, counsel, for Truck Moves Australia Pty Ltd, Quick Shift Vehicle Relocations Pty Ltd and Vehicle Express Pty Ltd.
M Gibian, counsel, with W Carr for the Transport Workers’ Union of Australia.
P Ryan for the Australian Road Transport Industrial Organisation.
Hearing details:
Sydney with video link to Melbourne.
2018.
March 19, 20.
April 13.
Printed by authority of the Commonwealth Government Printer
<MA000038 PR607655 >
2 MA000038.
3 MA000039.
4 [2017] FWCFB 1913 [87].
5 Ibid [110].
6 Exhibit TM1.
7 Exhibit TM2.
8 Exhibit TM3.
9 Exhibit TM4.
10 Exhibit TM5.
11 Exhibit TM6.
12 Exhibit TM7.
13 Exhibit TM8.
14 Exhibit TM9.
15 Exhibit TWU15.
16 Matter no. NSD2014/1249.
17 Exhibit TWU16.
18 Exhibit TWU17.
19 Exhibit TWU18.
20 Exhibit TWU19.
21 Exhibit TWU20 (unsigned, with annexure); exhibit TWU21 (signed).
22 Exhibit R1.
23 Exhibit TM4.
24 MA000038 cl 15.2.
25 Ibid sch C.
26 Exhibit TM3 [22]-[23].
27 Ibid [31].
28 Ibid [31]-[32].
29 Ibid [46]-[47].
30 Ibid [51].
31 PN350.
32 PN135
33 PN140-PN141.
34 PN151.
35 Exhibit TM3 [120]-[121].
36 Ibid [123].
37 Ibid [119].
38 Ibid [120].
39 TWU supplementary submissions [30].
40 PN217.
41 PN230.
42 PN231.
43 PN236.
44 PN156-PN158.
45 Exhibit TM2 [12]-[13].
46 PN456.
47 Exhibit TM2 [14].
48 Ibid [15].
49 Ibid [16].
50 Ibid [20].
51 PN440.
52 PN445-PN454.
53 Exhibit TM3 [62].
54 Exhibit TM2 [21].
55 Ibid [26].
56 PN411- PN416.
57 Exhibit TWU21 [11].
58 Ibid [14].
59 Ibid [31].
60 Ibid [35]-[42].
61 PN2862-PN2863.
62 Exhibit TWU21 [45]-[51].
63 Ibid [52]-[53].
64 Ibid [56]-[58].
65 Ibid [71].
66 PN2868.
67 PN2948-PN2985.
68 Exhibit TWU18 [11].
69 Ibid [14].
70 Ibid [17].
71 PN2416.
72 PN2415.
73 Exhibit TWU18 [24].
74 Ibid [25].
75 Ibid [30].
76 Ibid [37].
77 Ibid [38].
78 [2017] FWCFB 1001 [95]-[141].
79 [2017] FWCFB 1913 [87].