WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CITATION : 2016 WAIRC 00741 CORAM : SENIOR COMMISSIONER S J KENNER HEARD : THURSDAY, 21 APRIL 2016, THURSDAY, 2 JUNE 2016 DELIVERED : MONDAY, 5 SEPTEMBER 2016 FILE NO. : B 181 OF 2015 BETWEEN : THOMAS GEORGE HARTWIG Applicant AND INTERSTATE ENTERPRISES PTY LTD TRADING AS ATS RECRUITMENT SERVICES Respondent Catchwords : Industrial Law (WA) - Contractual benefits claim - Preliminary issue - Whether terms and conditions of Enterprise Agreement were expressly incorporated into employee's contract of employment - Principles applied - Clear words of agreement between contracting parties required - Application dismissed Legislation : Industrial Relations Act 1979 (WA) Result : Application dismissed Representation Counsel: Applicant : In person Respondent : Mr R Lindsay of counsel and with him Ms J Grant of counsel Solicitors: Respondent : Capital Legal Case(s) referred to in reasons: Australian Workers’ Union v BHP Iron-Ore Pty Ltd [2001] FCA 3; (2001) 102 IR 410 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Byrne v Australian Airlines Limited; Frew v Australian Airlines Limited [1995] HCA 24; (1995) 185 CLR 410 Gramotnev v Queensland University of Technology [2013] QSC 158 Soliman v University of Technology, Sydney [2008] FCA 1512; (2008) 176 IR 183 Tracey Louise Fergusson v The Salvation Army (Western Australia) Property Trust as the trustee for the Salvation Army (WA) Social Work trading as Salvos Stores [2014] WAIRC 01042; (2014) 95 WAIG 348 Case(s) also cited: FP Group Pty Ltd v Tooheys Pty Ltd [2013] FWCFB 9605 Cimeco Pty Ltd North Western Australian Construction Projects Agreement 2011 and Cimeco Pty Ltd Midwest and Goldfields Regional Construction Projects Agreement 2011 [2012] FWA 526 Servcorp WA Pty Ltd v Perron Investments Pty Ltd [2016] WASCA 79 Wilton & Cumberland v Cole & Allied Operations Pty Ltd [2007] FCA 725 Reasons for Decision 1 The applicant, Mr Hartwig, was employed by the respondent, Interstate Enterprises Pty Ltd, then trading as ATS Recruitment Services, now Tecside Group Pty Ltd, to perform truck driving services for Tecside’s client, BGC Transport. Tecside is a labour hire company which employs casual employees for engagements with Tecside’s clients Australia-wide. Mr Hartwig initially registered with Tecside in June 2013 and was informed at that time that he was being considered for an assignment with BGC Transport as a truck driver engaged in the haulage of grain dust. Mr Hartwig commenced the engagement with BGC as a casual HC driver on 7 October 2013. 2 As a part of the engagement, Mr Hartwig was offered and accepted Tecside’s standard ‘Conditions of Employment’ document, setting out the terms and conditions on which Tecside was to engage Mr Hartwig. Subsequently, during the course of the engagement, a dispute arose between the parties as to Mr Hartwig’s terms and conditions of employment. He maintained that the terms of the relevant BGC Transport Enterprise Agreement 2013 were expressly incorporated into his contract of employment. Thus, he was entitled to the benefits of that agreement. On the other hand, Tecside maintained that at no time did such an agreement become an express term of Mr Hartwig’s contract of employment. Tecside maintained that Mr Hartwig’s employment was covered by the Road Transport and Distribution Award 2010, a modern award of the Fair Work Commission. The agreed rate of pay was that as specified in Mr Hartwig’s initial engagement. 1360 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 96 W.A.I.G. 3 As Mr Hartwig now claims he has been denied some $42,412.50 in contractual entitlements, based on the BGC Transport Enterprise Agreement terms, a preliminary issue arises as to whether or not the BGC Transport Enterprise Agreement was an express term of the employment contract between Mr Hartwig and Tecside. Given the complexities of Mr Hartwig’s claim on the merits, the parties proposed, and the Commission agreed, to determine whether or not the BGC Transport Enterprise Agreement terms and conditions were expressly incorporated into Mr Hartwig’s contract of employment with Tecside as a preliminary issue. The facts 4 As noted above, Mr Hartwig attended the initial meeting on 26 June 2013. He met with Mr Sutton, then a recruitment consultant. Mr Sutton testified that as a client, BGC regularly requested Tecside to supply truck drivers for its operations. Mr Sutton said that he would regularly advertise for positions available, and registered candidates for when opportunities arose. Additionally, Mr Sutton testified that sometimes BGC would refer individuals directly to Tecside for consideration. 5 At the meeting on 26 June 2013, it was common ground that the Tecside standard terms and conditions of employment, called the ‘Conditions of Employment’, was provided to Mr Hartwig and explained to him. His evidence was that he read the document carefully before signing it. At that meeting, the rate of pay of $28 to $29 per hour, as being the applicable minimum hourly rate, was discussed. This was reflected in Mr Sutton’s notes of the interview and attached as annexure DS-4 to his affidavit. 6 As the document assumes some significance for the purposes of determining the preliminary issue, the ATS Recruitment Services Terms and Conditions of Employment for Casual Workers is set out as follows: ATS RECRUITMENT SERVICES Terms and Conditions of Employment for Casual Workers These Terms and Conditions of Employment are entered into between Interstate Enterprises Pty Ltd (trading as ATS Recruitment Services and hereinafter referred to as ‘ATS’) and THOMAS GEORGE HARTWIG of (address & postcode) 36 REPTON ST DAYTON (hereinafter referred to as the ‘Worker’). The Worker declares that all information provided to ATS is true and correct. The Worker understands that should any offer of casual employment be made by ATS it is subject to the following Terms and Conditions of Employment as detailed below: Terms and Conditions of Employment 1. Commencement of Employment Terms These Terms and Conditions apply from 26/6/13. 2. Nature of employment The Worker is engaged by ATS to provide his/her services to clients of ATS on a casual contract for services basis. 3. Replacement Contract These Terms and Conditions replace any previous Terms of Employment, whether written or verbal, which may exist between ATS and the Worker and any such contract shall be deemed to have been terminated by mutual consent as from the date of this contract. 4. Duties and Assignments a) ATS may offer employment and communicate duties to the Worker via telephone, in writing. SMS or electronic means. b) The Worker agrees and acknowledges that ATS may engage their services at such locations or sites as required by any ATS client (hereinafter referred to as ‘Client’). c) ATS will indicate to the Worker the prospective duration and conditions of an employment assignment. However, the Client has the right to vary any duration or assignment without notice, and ATS has the right to vary the duration and/or assignment likewise. d) Where the Worker accepts an employment engagement, the Worker must endeavor[sic] to complete that period of engagement. The Worker must inform ATS without delay should the Worker not be able to complete the employment engagement period. e) During the Worker’s term of engagement with the Client the Worker shall be supervised by, and must act in accordance with, the directions given by the Client and its authorised officers, agents or supervisors including, but not limited to, working hours, safety regulations and the manner in which the Worker Is[sic] to carry out his or her duties or provide his or her services to the Client. f) If the Worker is temporarily unable to work in any period of employment the Worker must give ATS at least eight (8) hours of notice before normal start time. g) The Worker must not agree to any changes in his/her workplace or duties on behalf of the Client without first obtaining the approval of ATS. h) The Worker warrants that he/she has the skills, capacity and competence required to perform the work for which the Worker is engaged and will carry out his or her duties, functions and obligations in a competent, professional and skillful[sic] manner. 96 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1361 5. Termination a) ATS win use reasonable endeavours to provide to the Worker assignments with its Clients. b) The Worker may reject or accept any offer of employment made by ATS. c) On completion or cessation of an assignment for any reason, ATS is under no obligation whatsoever to offer the Worker any further assignments. d) Employment may be terminated by either party, giving a minimum of four (4) hours of notice. ATS may at its discretion pay the Worker in lieu of notice. e) ATS reserves the right to summarily dismiss the Worker for gross misconduct as determined by ATS. 6. Wages ATS will pay the Worker his/her wages as follows: a) The Worker is required to present a weekly timesheet to ATS which has been duly signed by a Client representative confirming and authorising the hours so stated by 10am on a Monday morning for work undertaken in the previous week. Failure to present a signed and authorised timesheet by this time may result in a delay in the payment of wages until the following week. Payment is made on a weekly basis by electronic funds transfer into the Workers nominated bank account. b) Should any bank account details supplied by the Worker to ATS be incorrect, the Worker acknowledges that payment of wages may be delayed or lost and that ATS is not responsible or liable for any loss resulting In such circumstances. c) ATS accepts no responsibility for incorrect allocation of any payment by a bank, building society or credit union for reasons beyond its control. Delayed wages cannot be processed until ATS has recovered monies misallocated due to the Worker providing incorrect details. d) The Worker’s wages are calculated on an hourly or daily rate as agreed between ATS and the Worker. If the Worker accepts an employment assignment or engagement with a Client the Worker is deemed to have accepted the rate offered for the duration of that employment assignment with the Client. Should the Worker agree to accept an assignment on a flat rate basis for all hours or days worked, that rate includes all normal time and overtime components, and any other additional amount for any site allowance or tool allowances or the like. No further payments will be made in respect of such work when a flat rate is agreed. 7. Superannuation a) ATS will pay superannuation to the Worker’s designated superannuation fund. In the absence of providing sufficient details of a nominated superannuation fund, ATS shall make payment to the Recruitment Super Fund on the Workers behalf. b) Superannuation is paid in accordance with Superannuation Guarantee Legislation for ordinary hours which means those hours constituting a thirty eight (38) hour week or, where specified within the client/site/industry employment conditions relating to casual workers, an alternative percentage rate and/or hours as so stated. 8. Leave The Worker, being a casual Worker, is not entitled, subject to any applicable legislation, to any paid leave. 9. Policies and Procedures a) ATS’s policies and procedures, as varied from time to time, form a part of and are included in this contract and the Worker agrees to comply with them. b) The Worker also agrees to abide by the policies and procedures of the Client/s and sites to which they are assigned. 10. Confidential Information a) The Worker understands that during the course of employment with ATS and its clients that the Worker may become acquainted with or have access to confidential information relating to affairs, business dealings or transactions of ATS and/or the Client. The Worker agrees to maintain confidentiality of this information and to prevent its unauthorised disclosure or use by any other person, firm or company. b) The Worker shall not remove any confidential information from the premises of ATS or the Client without prior written consent from ATS or the Client. c) The Worker shall not, for whatever reason, either for the Worker or third party appropriate, copy, memorise or in any manner reproduce or reverse engineer any of the confidential information of ATS or the Client. d) The Worker must return all confidential information of ATS or the Client upon termination of the engagement with the Client or ATS. e) The Worker acknowledges that ATS may obtain, among other things, injunctive relief against the Worker for any breach of this contract at the Worker’s cost. f) The Worker must immediately notify ATS of any suspected or actual unauthorised use, coping or disclosure of confidential Information. 1362 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 96 W.A.I.G. 11. Restraint of Trade The Worker covenants not to work directly for a Client with whom the Worker has been engaged or introduced to by ATS without the written consent of ATS. Consent may be withheld at the absolute discretion of ATS where an agreement between ATS and the client is not in place. 12. Worker Obligations The Worker agrees: a) To notify ATS immediately in the event that an offer of casual, part-time or permanent employment is made to the Worker by the Client or an alternative supplier to that client. b) Not to engage or take part in any conduct or activity which may harm, or adversely affect, ATS’s or the Client’s operations or business or interests. c) To comply with all relevant Acts, regulations, statutes, legislations, codes of conduct or practice that may apply during the assignment. d) To comply with all ATS Occupational Health & Safety policies and procedures (as amended from time to time) as well as those of the Client including, without limitation, requirements as to the wearing of safety equipment whilst in areas requiring such equipment. e) To obey all lawful written and verbal health and safety instructions issued or displayed by either ATS or the Client. f) If the Worker accepts an assignment or engagement that requires a license, ticket or certification of any type whatsoever, (including, but without limiting the type of license required, a valid driver’s license of any class), then the Worker must ensure that those licenses are current and remain valid during the period of the employment assignment. The Worker must immediately notify ATS if such license, ticket or permit expires or is revoked or declared invalid. g) To undertake police checks and clearance at his or her own expense either whilst on an employment assignment with a Client or prior to being offered an assignment if requested to do so by either ATS or a Client unless agreed otherwise by ATS. h) To abide by the relevant road traffic legislation when operating any client equipment or machinery. Any traffic infringements sustained whilst operating such plant or machinery will be the Worker’s responsibility. i) In the event of any damages to the Client’s equipment or machinery, which is caused by the Worker’s negligence, the Worker will be responsible and personally liable for loss or damage occasioned and if insured for an insurable risk then the Worker is liable for any insurance excess. 13. Workers Compensation ATS is responsible for statutory workers compensation insurance. In the event of an injury occurring during an assignment, the Worker must immediately notify ATS of the incident or accident. Failure to do so will determine that the Worker does not qualify for workers’ compensation insurance. The Worker accepts this fundamental principle as a condition of employment. 14. Governing Law These Terms and Conditions are governed by, take effect and are constructed in accordance with the laws in force in the relevant state or territory of Australia and the parties submit to the jurisdiction of the state or territory applicable. 15. Variation These Terms and Conditions may only be varied in writing and executed by both the Worker and ATS. Worker Signature [signed] Date 26/6/13 ATS Signature [signed] Date 26/6/13 On behalf of INTERSTATE ENTERPRISES PTY LTD (trading as ATS) (Exhibit R1, annexure DS-1. My emphasis) 7 For present purposes, an important part of this document is cl 6(d), which I comment on further below. 8 Mr Hartwig subsequently commenced the engagement at BGC at the rate paid by Tecside. Set out at annexure DS-2 to Mr Sutton’s affidavit are a series of payment advices referring to Mr Hartwig’s name, pay date, pay period and the relevant earnings information. The hourly rate set out was $29.15 per hour. That base hourly rate subsequently increased to $31.15 per hour from September 2015. 9 Mr Hartwig testified that after receiving his first pay slip, he began to query his rate of pay. He telephoned Mr Sutton in about late October 2013. Mr Hartwig said that he queried his classification as a ‘HC Driver Semi Tipper grade 7’, because he was then driving a truck and trailer. Mr Sutton testified that Mr Hartwig also queried his nightshift rate of pay. Mr Sutton’s evidence was that he answered Mr Hartwig’s queries and although he did not seem particularly happy with the outcome, he thought the information provided meant that Mr Hartwig understood his pay rate. A copy of the Tecside system notes, including conversations between Mr Hartwig, Mr Sutton and others, was annexure DS-3 to Mr Sutton’s affidavit. 96 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1363 10 Mr Sutton said that a couple of days after the first telephone call from Mr Hartwig he received a further telephone call. Mr Hartwig asked Mr Sutton for a copy of the ‘BGC EBA’. Mr Sutton said that in response to Mr Hartwig’s request, he sent an email to him attaching an internet link to the Fair Work Commission website, with the list of registered enterprise agreements, publically accessible. It was Mr Sutton’s evidence that at no time during any conversation with Mr Hartwig, did he say that Mr Hartwig’s terms and conditions of employment were as set out in the BGC Transport Enterprise Agreement. To the extent that Mr Hartwig claimed to the contrary, Mr Sutton strongly denied it. It was Mr Hartwig’s evidence that he could not access the BGC Transport Enterprise Agreement from the FWC link. He rang Mr Sutton again and Mr Sutton read out to him the actual internet address information. Mr Hartwig said he subsequently found what he was looking for. Mr Hartwig testified that he also spoke to ‘Siobhan’ at Tecside about various other things, including not getting paid the proper meal allowance. 11 It was Mr Hartwig’s evidence that no-one at Tecside told him that the Road Transport and Distribution 2010 modern award applied to his employment. 12 Mr Sutton said he was well aware that employees of Tecside, when working for a client on site, sometimes queried their rates of pay. This is because they are generally working side by side with employees of the client company, and both groups of employees often talk about their terms and conditions of employment. 13 This issue was taken up to an extent in the evidence of Mr Pollack, the Chief Executive Officer of Tecside. His evidence was that as a labour hire business, Tecside, whilst being covered by the Road Transport and Distribution Award, also has regard to the applicable rates being paid at the client’s site, when setting rates to pay its own employees. This includes rates of pay under relevant industrial instruments, to ensure there is some parity between the client and Tecside, in order to both attract and retain employees. He also said that in about July 2015 he spoke to Mr Hartwig on the telephone. Mr Pollack explained that contrary to Mr Hartwig’s apparent understanding, Tecside was not a party to the BGC Transport Enterprise Agreement, the modern award applied as minimum conditions, and Tecside paid in excess of the award. Consideration 14 For the purposes of determining this preliminary issue, the question to be asked and answered is what were Mr Hartwig’s terms and conditions of employment as specified in his contract of employment? It is readily apparent from the terms of the contract of employment document set out above, that the contract between Mr Hartwig and Tecside was both written and oral. The majority of the terms were written. The oral term related to that specified at cl 6(d) in relation to the wage rate, which was to be ‘as agreed between ATS and the Worker’. In this case, this related to the earlier discussion between Mr Hartwig and Mr Sutton, in June 2013, when the rate of pay for the BGC assignment was mentioned. Importantly also, is the balance of cl 6(d), which provided that if the employee accepted an employment assignment with a client, they are deemed to accept the wage rate offered for the duration of that assignment. 15 Mr Hartwig in his evidence, and as noted above, said that he read the terms and conditions of employment document very carefully. He said he understood it. Both Mr Hartwig and Mr Sutton agreed that the hourly rate of $28 to $29 per hour was discussed in the initial meeting as being applicable to the BGC assignment. The rate of pay initially paid to Mr Hartwig, on the commencement of his assignment, was $29.15 per hour, as set out at annexure DS-2 to Mr Sutton’s affidavit, that being Mr Hartwig’s pay advices for the material time. This was consistent with what Mr Hartwig and Mr Sutton discussed in the initial meeting. In accordance with the terms of the employment contract between Mr Hartwig and Tecside, which in my view are clear and unambiguous, in commencing the assignment with BGC, Mr Hartwig was taken to have accepted the hourly rate of pay discussed in June 2013, and paid to him on his commencement. 16 As at the time of the formation of the contract of employment and its operative effect, which must be taken to include both the employment contract document as signed on 26 June 2013 and the later confirmation of the terms by Mr Hartwig, on his acceptance of the BGC assignment and commencing at BGC in October 2013, no reference at all had been made by either party, to the terms of the BGC Transport Enterprise Agreement as being a term and condition of Mr Hartwig’s employment. That is, at the time the contract of employment was formed, and at the time of its commencement and performance, there can be, in my view, no basis to contend that the BGC Transport Enterprise Agreement, whatever that ultimately was, expressly formed any part of it. 17 There is only one possible basis for Mr Hartwig to contend to the contrary. That is the subsequent telephone conversation between himself and Mr Sutton, when he queried his rates of pay, the reference by him to the BGC Transport Enterprise Agreement and Mr Sutton sending him the FWC internet link for enterprise agreements, somehow led to the express incorporation of the BGC Transport Enterprise Agreement into his contract of employment. In my view, for the following reasons, which I can briefly outline, that proposition is not tenable. 18 It is trite to observe that awards and industrial agreements are independent from contracts of employment, as was made clear in Byrne v Australian Airlines Limited; Frew v Australian Airlines Limited [1995] HCA 24; (1995) 185 CLR 410. Incorporation of the terms of industrial instruments into contracts of employment will not be lightly inferred. Notably, in Byrne, the issue was whether relevant terms of an award that bound the parties was implied or imported into the contract of employment. Even in the case where an employer is a party to a relevant award or industrial agreement, which is not the case here, as I observed in Tracey Louise Fergusson v The Salvation Army (Western Australia) Property Trust as the trustee for the Salvation Army (WA) Social Work trading as Salvos Stores [2014] WAIRC 01042; (2014) 95 WAIG 348 at [16]: 16 … The mere mention of an award, or a provision of one, will not provide a basis to conclusively determine that the award is contractually binding. As the learned authors in Sappideen C, O’Grady P, Riley J and Warburton G, Macken’s Law of Employment (7th ed, 2011) 266 say: Nevertheless, mere mention of the existence of an award or enterprise agreement which binds the parties will not conclusively determine that the award or agreement clauses are incorporated into and 1364 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 96 W.A.I.G. binding in contract. It may be that on proper construction of the contract document, the reference to the award or agreement manifests nothing more than an acknowledgment by the parties of the statutory instruments which will also govern their relationship, according to the terms of the statute. Mention of industrial instruments in a contract document may serve to identify ‘relevant information capable of affecting the parties contractual relations rather than documents intended to be binding and enforceable as part of their contractual relations’. 17 Thus, the reference to industrial instruments in contracts of employment in terms such as “are prescribed by”; “are as prescribed”; “subject to and governed by”, have been held to be insufficient to constitute words of incorporation: Gramotnev v Queensland University of Technology [2013] QSC 158; Australian Workers’ Union v BHP Iron-Ore Pty Ltd [2001] FCA 3; (2001) 102 IR 410; Soliman v University of Technology, Sydney [2008] FCA 1512; (2008) 176 IR 183. 19 The facts of this case, even putting Mr Hartwig’s contentions at their very highest, fall far short of establishing that the terms of the BGC Transport Enterprise Agreement were expressly incorporated into his contract of employment, such that they would be enforceable as contractual benefits by him. I accept on the evidence, Mr Hartwig asked Mr Sutton for a copy of the BGC Transport Enterprise Agreement, because he was trying to ascertain what those terms and conditions were. Mr Sutton, to assist him, directed him to the FWC website, where enterprise agreements registered under the Fair Work Act 2009 (Cth) may be accessed. 20 In my view, such a communication could never be reasonably construed as supporting express incorporation of such an instrument, whatever the terms of that agreement may well be. Even if such an act could constitute in some way, express incorporation, on the evidence, reference to the “BGC Agreement” was vague and ambiguous. There was no specification or proper identification of the relevant BGC Transport Enterprise Agreement itself, at the time. Furthermore, there was no identification or express reference to any particular terms of that agreement, which could support the incorporation proposition. Clear words of agreement between the contracting parties would be required to support express incorporation on this basis. 21 Furthermore, the parties to the relevant contract of employment in this case were Mr Hartwig and Tecside. There was no employment relationship between Mr Hartwig and BGC. There was a commercial contract between Tecside and BGC for the provision of labour hire services, but that contract conferred no benefits directly on Mr Hartwig. 22 Whilst some reference was made to a meeting between Mr Hartwig and Mr Sutton sometime in November 2014, where pay rates were discussed, this was well after the contract was formed and performed. In my view, nothing said in that meeting could constitute any evidence of a variation to the contract of employment between Mr Hartwig and Tecside, even if Mr Sutton had authority to contract on behalf of Tecside, which Tecside contended he did not. 23 Even though it was not a part of Mr Hartwig’s claim or argued as such, nor in my view, on the facts, would there be any basis to contend that the BGC Agreement would be incorporated, as an implied term, into Mr Hartwig’s contract of employment, on the authority of BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266. The contract of employment between the parties was clearly effective without such a term. 24 Finally, I must say that much of the dispute that arose between the parties could have been avoided through better communication. I consider that Tecside should have made it clear to Mr Hartwig that the Road Transport and Distribution Award applied to his employment at the initial recruitment stage. It further could have indicated that the company paid in excess of the minimum award rates, taking account of rates paid on the client’s site. This is so because as Mr Sutton said in his evidence, these are matters that employees will discuss amongst themselves anyway. It is far better in my view, that these matters be clearly communicated at the outset, to avoid unnecessary confusion and potential disputation. 25 For the foregoing reasons, I am not persuaded that the contract of employment between Mr Hartwig and Tecside expressly, or by implication, incorporated the terms of the relevant BGC Transport Enterprise Agreement. Accordingly, the application must be dismissed. 2016 WAIRC 00742