Western Australian Industrial Relations Commission

Use of heavy vehicle may be express or implied term in owner-driver contracts

The Full Bench upheld an appeal against a decision of the Road Freight Transport Industry Tribunal and found the Tribunal's interpretation of s 5(1) of the Owner-Drivers (Contracts and Disputes) Act 2007 to be too narrow and inconsistent with the purpose of the Owner-Drivers Act. The Honourable Acting President Smith, with whom Commissioners Emmanuel and Matthews agreed, found that for a contract to be an owner-driver contract under the Owner-Drivers Act it is not necessary for the contract to expressly provide for the use of a heavy vehicle, providing a term can be implied that objectively a heavy vehicle is required to transport goods.

The Hon A/President referred in her reasons for decision that the effect of this construction could be illustrated by the following example where the terms of a contract were otherwise unspecified.  If a contract required the transportation of a tank, it may be implied that a heavy vehicle would be required. However, if the contract required the transportation of a pizza then a heavy vehicle would not be necessary to fulfil the contract.

The decision of the Road Freight Transport Industry Tribunal was suspended and the matter remitted for further hearing and determination. This was because the matter at first instance was determined on the papers and there was conflicting and competing affidavit evidence so that it could not be determined on the facts if the appellant and respondent were parties to an owner-driver contract.

The decision can be read here

Use of a “heavy vehicle” must be expressly stated to invoke Tribunal’s jurisdiction

The Road Freight Transport Industry Tribunal has dismissed an applicant’s claim for wrongful termination of contract and unconscionable conduct, on the basis that the agreement between the parties did not constitute an “owner-driver contract” as there was no requirement under the agreement and no business requirement for the applicant to use a heavy vehicle.

The Tribunal found that unless the terms of the contract provide for the use of a heavy vehicle as defined in s 3 of the Owner-Drivers (Contracts and Disputes) Act 2007 (WA), then the resulting contract is not one amenable to the Tribunal’s jurisdiction.

The Tribunal held that while the respondent would have been aware the applicant was considering obtaining a larger vehicle to perform the services, that is not the same as constituting an agreement that the applicant use a heavy vehicle for the purposes of the OD Act.

The application was dismissed for want of jurisdiction.

The decision can be read here

An expectation of work was not enough to vary the owner-driver contract 

Employee awarded $77,930.84 for unfair dismissal. The applicant, a business which owns and operates a truck, contracted to provide transport services to the respondent. The respondent’s customers, such as Linfox, would request transport services and the respondent would offer the work to its contractors. Following discussions with the respondent’s Operations Director about Linfox seeking float services, the applicant decided to purchase a float.

Today, the Road Freight Transport Industry Tribunal rejected the applicant’s claim that the owner-driver contract was varied to include a term that if the applicant acquired a float, the respondent would hire it at a certain rate.


On the evidence, the Tribunal found that the respondent operated its business on the basis that its workflow was dependent on requests from customers, and the respondent could never guarantee a minimum level of work. At best, the applicant had an expectation that it would receive float work.

Commissioner S J Kenner considered the principles in relation to the variation of a contract, promissory estoppel and implied terms.

While an estoppel was not made out, Commissioner S J Kenner considered that the Tribunal can have regard to equitable principles when determining a contractual dispute between a hirer and an owner-driver.

The decision can be read here.

Unconscionable conduct and rates of pay not 'safe and sustainable’

The Road Freight Transport Industry Tribunal has upheld in part, an owner-driver’s claim for breach of contract and unconscionable conduct.

The respondent terminated the owner-driver contract summarily without notice for breach. The reasons for the summary termination of the contract were disputed by the owner-driver and several issues were raised in response, including:

  • that the respondent failed to comply with its obligation under the contract to give notice to the owner-driver of its default and to give it an opportunity to remedy any alleged breaches of the contract;
  • that the owner-driver maintained it was not in breach of the contract by failing to comply with the respondent’s leave policy and that all leave taken or proposed to be taken was approved by the respondent; and
  • that the owner-driver, in not working Saturdays after the first two years of performance under the contract, did so with the knowledge of and acquiescence by the respondent and the respondent cannot now complain.

The owner-driver maintained the respondent engaged in unconscionable conduct in the way it allocated work to it and by the way the contract was terminated, which was said to involve deception by the respondent. Finally, the owner-driver claimed the rates paid by the respondent under the contract were not “safe and sustainable rates” for the purposes of the Owner-Drivers (Contracts and Disputes) Act 2007 (WA) and the Owner-Drivers (Contracts and Disputes) (Code of Conduct) Regulations 2010 (WA).

Senior Commissioner Kenner found that the negotiations for the contract between the owner-driver and the respondent were not unconscionable. However, he concluded that the failure to provide the owner-driver with a copy of the Guideline Rates published by the Road Freight Transport Industry Council, was unconscionable for the purposes of s 30(2)(g) of the OD Act.

Senior Commissioner Kenner was not satisfied on the evidence, that the respondent was able to rely on the owner-driver’s failure to work Saturdays, as a ground to find there was a breach of contract and to terminate it. The Senior Commissioner was satisfied that the owner-driver was in default of the contract by proceeding to take extended leave, contrary to the respondent’s revised policy. However, the respondent did not give notice to the owner-driver under the contract of the alleged default, and give it an opportunity to remedy it.

Senior Commissioner Kenner found the removal of the lifter was plainly a breach of the contract. The respondent took unfair advantage of the situation and removed the lifter in a deceptive way. Accordingly, the Senior Commissioner found such conduct to be unconscionable. As to the allocation of work and the distribution of runs, the Senior Commissioner was not satisfied the owner-driver made out its case in relation to unconscionable conduct.

Finally, Senior Commissioner Kenner found the rates of payment to the owner-driver under the contract were not safe and sustainable rates.

The parties were directed to confer as to the quantum of damages and any sum in respect of safe and sustainable rates.  

A copy of the decision can be found here.

Unilaterally changing a roster was a breach of contract giving rise to damages

 
The applicant is a business which owns and operates trucks which transport groceries to stores in Perth. In October and December 2009 the applicant and the respondent exchanged letters whereby the applicant agreed to assign its two ‘cold store’ contracts to the respondent.
 
The Road Freight Transport Industry Tribunal held today that the agreements, on their proper construction, obliged the respondent to allocate predominantly cold store work to the applicant.

The Tribunal considered that the letter of October 2009 was ambiguous, so extrinsic evidence of the surrounding circumstances and the object and purpose of the transaction was referred to in objectively determining the parties’ intentions. The terms of the October 2009 agreement were implied into the December 2009 agreement.

The Tribunal held that the respondent breached the agreement in 2010 by changing the roster to shift one of the applicant’s contracts to the ‘dry store’. The Tribunal awarded the applicant damages in the sum of $69,600 for its expected earnings.

This matter was also the first time the Tribunal considered the unconscionable conduct provisions in the Owner-Drivers (Contracts and Disputes) Act 2007.

 

The decision can be read here.

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