Australian Rail, Tram and Bus Industry Union of Employees, Queensland Branch v Brisbane City Council, Brisbane Transport [2014] QIRC 110

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION CITATION: Australian Rail, Tram and Bus Industry Union of Employees, Queensland Branch v Brisbane City Council, Brisbane Transport [2014] QIRC 110 PARTIES: Australian Rail, Tram and Bus Industry Union of Employees, Queensland Branch (Applicant) v Brisbane City Council, Brisbane Transport (Respondent) CASE NO: D/2013/167 PROCEEDING: Section 229 - Notification of industrial dispute DELIVERED ON: 4 July 2014 HEARING DATES: 28 March 2014 MEMBER: Industrial Commissioner Black ORDERS : 1. That the employer is entitled to retire from informal agreement upon reasonable notice; 2. That specified drivers continue to be paid additional remuneration until 31 December 2013. CATCHWORDS: INDUSTRIAL DISPUTE - dispute notification - conciliation conference unsuccessful - matter referred to arbitration - status of an informal agreement to pay certain bus drivers an additional payment considered - where ability of the employer to retire from the informal arrangement was challenged. CASES: Industrial Relations Act 1999 s 230 APPEARANCES: Mr P. Allen, Australian Rail, Tram and Bus Industry Union of Employees Mr A. Herbert Counsel, instructed by Brisbane City Council. -- 1 of 11 -- 2 Decision Introduction [1] This matter arises from the notification of an industrial dispute by the Australian Rail, Tram and Bus Industry Union of Employees, Queensland Branch (the Union) in relation to a decision of the Brisbane City Council (the Council) to rescind an additional payment historically made to bus drivers who operate the "City Sights" tour service. The dispute notification was lodged with the Commission on 10 October 2013. [2] The Council commenced a "Look About" tour service some time in the mid 1980's. The service was subsequently rebranded as "City Sights" tours in the mid 1990's. Sometime in 2013 Council decided to relocate the service from the Bowen Hills Depot to the Toowong Depot. This change took effect from 14 October 2013. The change of depot was one of a number of changes made to the service by Council. The matter in contention in these proceedings is the change which brought about a diminution in remuneration for the drivers of the service. [3] It is not in dispute that sometime in 1996 an agreement was reached between the Council and the Union which provided for drivers of the City Sights buses to be paid additional remuneration. The extra remuneration involved paying the drivers the equivalent of the average broken shift earnings of normal routed bus drivers on weekdays. It was the evidence of Mr Matters that the agreement was not reduced to writing and that it was not unusual for the Union and the Council at the time to regularly resolve issues informally. [4] No substantiated explanations about the basis or underlying rationale for the additional payment were forthcoming. As I understand it, City Sights bus drivers do not work broken shifts hence the additional payment may have been made to ensure that drivers transferring to the City Sights service did not suffer any reduction in weekly pay. However it was also possible that the additional payment recognised the particular skills and attributes that were peculiar to the operation of the City Sights service. An expression of interest memorandum dated 29 January 1996 which was in the evidence as an attachment to Exhibit 3 stated that City Sights operators "must exhibit a high standard of presentation, have a sound knowledge of the service and be customer focused". The key duties and responsibilities set out in the memorandum included:  Constantly upgrading knowledge of attractions;  Clear diction and appropriate language when communicating with customers;  Use of taped voice sequences as required;  Distributing public notices and other marketing material;  Developing good communications with front counter staff at attractions;  Developing charter opportunities and product awareness in the local market place. -- 2 of 11 -- 3 Necessary attributes for the drivers included a "welcoming and outgoing personality" and the "ability to quickly establish a rapport with a broad range of customers". [5] In his statement (Exhibit 7) Mr Geyer drew attention to provisions that were included in the Motor and Trolley Bus Drivers, Conductors, Etc. Award - Brisbane City Council (1991). The award provided that a driver "operating the tram bus on 'City Sights' service" was to be eligible for classification as Bus Operator Level 3. Further the award provided that a driver "conducting Lookabout Tours" would be eligible to be classified as Bus Operator Level 4 (subject to satisfaction of other conditions). Further I note that the amendments to the Brisbane City Council - Bus Transport Employees' Award 2003 which came into effect on 19 December 2005 provided for drivers "conducting specialised Tours" to be eligible for classification as Bus Operator Level 4. Further Schedule 1 - Service Standards at clause 2 provided a list of training opportunities for Bus Operators which included "knowledge of Citysights and commentary technique". These provisions suggest that past determinations have been made under the award about the appropriate classification level for drivers operating the City Sights service. Notwithstanding the award regulation, the 1996 arrangement was entered into and allowed to continue in operation. [6] However in 2013 Council acted unilaterally to withdraw the additional payment. This decision of Council coincided with the closure of the Bowen Hills depot and the transfer of the City Sights service to the Toowong depot. Prior to the move to Toowong, four drivers were engaged full time on the City Sights service. That number reduced to three when one driver elected not to transfer to Toowong. Subsequently one of the remaining drivers left the Council's employment. [7] It was Mr Guerrini's evidence that he was about $100 per week worse off as a result of the change in pay arrangements. Mr Howe agreed that this estimate would be "fairly accurate" (T1-74). Further Mr Guerrini indicated that when the City Sights service was relocated to Toowong, drivers were no longer engaged on a full time basis. He said that under the new arrangements, three shifts per day were worked. One shift involved full time City Sights work, while the second and third shifts involved a mix of City Sights work and local work. The drivers rotated through these three shifts. At least for some of the time, a similiar shift arrangement had applied at Bowen Hills. Mr Guerrini said that the commentary on the city sights work was now automated and drivers do not have to provide a commentary, although there were occasions when the automated voice arrangement malfunctioned and the driver would need to take over the commentary or correct errors arising from the automated commentary. [8] After the dispute failed to settle in conciliation proceedings it was referred for arbitration where the Commission was asked to determine answers to the following questions: A. Whether arrangements entered into between the ARTBU and the Brisbane City Council in or around 1996, by which bus operators conducting City Sights tours were to be paid an average of the broken shift weekday roster in lieu of the wages entitlements under the -- 3 of 11 -- 4 applicable industrial instrument, were arrangements which had the effect of creating legally enforceable entitlements of an indefinite duration in any employees of Brisbane City Council, which entitlements prevailed over the terms of any applicable industrial instruments. B. If yes to A. above, which employees of Brisbane City Council are entitled to the benefit of such arrangements? C. If yes to A. above, whether the Brisbane City Council is entitled to unilaterally terminate the operative effect of the said arrangement, insofar as those arrangements provide for wages or benefits in excess of the wages or benefits under the applicable industrial instruments; and D. If yes to A. above, whether the Brisbane City Council has lawfully terminated those arrangements by its actions in that regard in 2013. Witnesses [9] The Union called the following witnesses:  Bennet Roche  Mark Guerrini  David Matters The Council called the following witnesses:  Brett Howe  Alan Geyer  Sally Briggs  Timothy Swift July 31 Meeting [10] A matter in contention between the parties arises from claims made by union representatives and Mr Guerrini to the effect that Mr Geyer gave a guarantee at a meeting on 31 July 2013 that City Sights drivers transferring to Toowong would not suffer any reduction in remuneration. Mr Roche's recollection of the meeting was that Mr Geyer told the meeting that the same remuneration structure would apply to drivers. Mr Matters and Mr Guerrini who also attended the meeting supported Mr Roche's version of events. Council witnesses however denied that any such promise had been made and stated that Mr Geyer informed the drivers that the additional payment would not be continued after the service shifted to Toowong. [11] It was not in dispute that Mr Geyer informed the meeting that the service would move to Toowong; that it was up to the drivers whether they elected to transfer to Toowong or move to another depot; that the financial performance of the service needed to be greatly improved, and that an automated announcement service was being trialled and would be used. [12] Mr Guerrini said that he knew that the Bowen Hills Depot was to close and that a shift of the service from Bowen Hills to Toowong had been rumoured. However he -- 4 of 11 -- 5 was not aware prior to the 31 July meeting that the move to Toowong was certain to occur. Union Submissions [13] Mr Allen's submissions on behalf of the Union included the following propositions:  A promise was made by management at a meeting of relevant members and their union representatives on 31 July 2013 to the effect that the remuneration of City Sights drivers would not change upon transfer to the Toowong Depot. Council was obliged to honour this promise;  While Council said they informed drivers their pay would be cut they agreed that they were surprised that there was no adverse reaction at the meeting. It was the Union's view that given that drivers would suffer a reduction in wages of $100 a week if the pay cut was implemented, it was implausible that Council could have announced such a change or that any such change was clearly communicated;  It was reasonable for drivers to expect that an arrangement that had been in place for well over a decade would remain, and it was reasonable for them to expect and accept an assurance from their manager that the arrangement would not change upon transfer to Toowong;  The evidence supports a conclusion that City Sights drivers exercise more and different skills than other drivers operating a normal routed service. The evidence of Mr Guerrini in particular established that superior customer service and interpersonal skills were required together with an expanded knowledge of the city's attractions. [14] It was submitted that the authorities emphasise the importance of custom and practice in arriving at determinations such as that required to be made by the Commission in this matter. Recognition of custom and practice is strengthened in circumstances where the arrangements in contention are well known to the parties. [15] While it is unusual that the 1996 agreement was not reduced to writing, there is acceptance by the parties that an agreement existed and that the existence of the agreement provided the only basis for the additional payment to be made. [16] The basis for the agreement and the need for the agreement becomes clear on the evidence. Mr Matters, who was most directly involved in the formulation of the agreement, gave evidence to suggest that the additional payment involved a recognition for additional skills and a recognition of potential lost income because of the roster change. Further Mr Geyer indicated that the additional payment may have been made to facilitate the attraction of particularly good candidates. What is clear is that the City Sights drivers' job is different and that the job requires extra skills to be exercised. [17] The Union submitted that the questions to be answered should be answered as follows: -- 5 of 11 -- 6 A. The arrangements entered into between the Union and Brisbane City Council in 1996, as outlined in question A, prevail over the terms of the applicable industrial instrument; B. The drivers who operate the City Sights bus service are entitled to the benefit of the arrangements; C. Council was not entitled to unilaterally terminate the operative effect of the 1996 agreement; D. It was unlawful for Council to terminate the arrangements in 2013. Council Submissions [18] In its submission Council rejected the proposition that, once entered into, the arrangements in question could never be changed. It suggested that if this were to be the case then the arrangements could be characterised as a unique species of industrial regulation different from an award or enterprise agreement both of which can be subject to change either through arbitration or negotiation. [19] Council said that the additional payment made to drivers was an over award payment and a payment not derived from the provisions of any industrial instrument. There was nothing to preclude the employer from retiring from such a payment if it chose to do so. It was always open to the parties to bring the arrangement under the cover of Council's enterprise agreement or into the award if they wished, but they did not do so. The effect of this submission was that neither of the parties had sought to make the 1996 arrangements legally enforceable. [20] Council submitted that the Commission should not exercise a discretion to impose upon the parties, in the absence of a work value case, the continuation of an arrangement which has no status in industrial law and which had never been sought to be included in the enterprise agreement or the award. The only way that the Commission could order the Council to continue an over award payment would be if the Commission were satisfied on work value grounds that the work was worth more. If the Commission was not satisfied that the work was worth more, it would be inappropriate to order the continuation of the payment. [21] The Commission should rule that the 1996 agreement should be construed as being an agreement which is able to be terminated at the will of either party, subject to appropriate notice and other relevant considerations. [22] Council submitted that Question A. should be answered in the negative and as such Council was not obliged to respond to the subsequent questions. However in electing to deal with certain matters raised in other questions, the Council submitted that:  None of the employees currently engaged in the operation of the City Sights service were parties to the agreement made in 1996. Consequently no current employee is entitled to the benefits of those arrangements. Further, it would be untenable to hold that future employees should have a legal claim on the 1996 entitlements. -- 6 of 11 -- 7  The 1996 arrangements are to be construed as an agreement at will. Consequently Council is entitled to unilaterally terminate the operative effect of the arrangement, subject to giving appropriate notice and having appropriate consultations and complying with any other related obligation. In this regard, Council has given appropriate notice and completed appropriate consultation. Further Council has justified the changes to the City Sights service, including employee remuneration, on a range of financial and other grounds. It follows that Council has discharged any legal obligations that may have attached to the ending of the 1996 agreement. Conclusion [23] The subject dispute arises because no one can say with any degree of certainty whether the terms of the informal agreement entered into in 1996 included terms dealing with the life of the arrangement or the procedure to be followed in the event that either side wanted to vary or terminate the arrangement. The desirability for the inclusion of such terms is self-evident. Very few provisions in industrial instruments, if any at all, would be deemed immutable. In the case of the 1996 arrangement it is not difficult to envisage the emergence of changed circumstances which might motivate either party to question the continuation of the agreement. [24] In the absence of any evidence shedding light on the rights and obligations of the parties in the areas just mentioned I do not think that a view to the effect that the 1996 agreement should have perpetual life is tenable. In my view the only sustainable conclusion that can be arrived at is that the agreement must be deemed to be terminable on reasonable notice and on the satisfaction of other obligations that might reasonably apply in the particular circumstances of this case. The determination of this matter therefore swings on a consideration of the question of reasonable notice and any other obligation that might reasonably apply. [25] The legitimacy of Council's decision to retire from the 1996 arrangements will be determined by a consideration of the following factors: (i) When did drivers know as a matter of finality that their remuneration would be cut; (ii) How was the decision to withdraw from the 1996 agreement communicated; (iii) Given that the reduction in remuneration coincided with the closure of the Bowen Hills depot and the transfer to the Toowong Depot, what measures were taken to ensure drivers were fully aware of the conditions of employment to apply on commencement at Toowong; (iv) Were drivers given an adequate opportunity to consider their position and to get answers to questions about the transfer to Toowong and the new remuneration arrangements; (v) Having regard to the above was the notice given by Council of the change of arrangements reasonable. -- 7 of 11 -- 8 [26] Without traversing all the evidence, it is not as clear as it should have been that Council effectively communicated the consequences of the decisions it had taken concerning the operation of the City Sights tours. [27] Given that the employer was proposing a significant change to employment arrangements, the employer had the responsibility to clearly and appropriately communicate these changes. While general announcements made at a meeting of interested parties on 31 July 2013 were an important part of the process, it is not the medium through which to effect changes of conditions of employment. The appropriate medium to formally confirm changes should be in writing addressed to the affected employees. Such a communication would include reasonable notice of the change, clearly spell out the impact of the changes on the employee, and address consultative considerations that might be necessary or appropriate to ensure employees were fully informed on the choices available to them and had access to all relevant information. [28] It is reasonably clear on the evidence that the 31 July 2013 meeting did not achieve the purpose of clearly communicating the resulting changes in conditions of employment to affected employees. A review of all the evidence around the meeting of 31 July 2013 discloses that there was uncertainty around the very sensitive issue of whether employee's would suffer a diminution of remuneration. So much is clear from the evidence of Council officers:  Timothy Swift said "I recall that Alan stated the pay for the City Sights operators who transferred to Toowong would be in accordance with the EBA and award." (para. 6 of Exhibit 4);  Mr Swift said in his evidence in the proceedings that "no one made a statement that there's going to be a pay cut" (T1-52);  Sally Briggs said that Alan Geyer was "absolutely clear that anyone transferring to Toowong would be paid for the work actually done. It is possible that the above deponents did not realise the implications of that statement as I do not recall that they expressed any opposition." (para. 6 of Exhibit 6);  Brett Howe said that Alan Geyer said that "any of the operators transferring to Toowong would be paid on the basis of the work done." (para. 4 of Exhibit 8);  Mr Howe said in his oral evidence that the lack of opposition surprised him (T1-74); he also said at T1-75 that "its possible that they didn't comprehend what the discussion was about". He further stated that this possibility was indicated to him by the drivers or their representative, but he did not say when these indications were passed on.  Mr Geyer acknowledged in his oral evidence that he was surprised that his proposed change of remuneration did not attract opposition at the meeting. He said that the Council management team who were at the meeting spoke of the surprise after the meeting (T1-68). -- 8 of 11 -- 9 [29] It seems to me that expressions used in the meeting such as "in accordance with the EBA and award" and "paid on the basis of the work done" were unnecessarily vague and the above references support a conclusion that that what may have been intended by the Council in making its announcements at the 31 July 2013 meeting, was not translated with sufficient clarity to employees and others attending. In the end result both sides left the meeting with different impressions of the consequences of the operational changes on the remuneration of drivers. [30] Despite the vagueness associated with the outcome of the 31 July 2013 meeting it would have been expected that the Council decision would have been unambiguously communicated at some future point and before the shift to Toowong. However the evidence in the proceedings lacked clarity in this regard. At paragraph 12 of Exhibit 7 Mr Geyer stated that he had a number of discussions and two meetings about the mode of payment with David Matters between 31 July and 14 October 2013. Mr Geyer said that he did not alter the position he had outlined in the 31 July 2013 meeting. I presume from this evidence that at some point between 31 July and 14 October 2013 Mr Matter's became aware that drivers' remuneration was to be decreased. [31] Ms Briggs said in her statement (Exhibit 6) that after the 31 July 2013 meeting a further meeting was convened for 21 August 2013. In this respect she said that she "met with David Stone and perhaps Mark Guerrini". If this discussion took place there was no evidence indicating what was discussed. Ms Briggs then went on to say in her statement that on 3 September 2013 Mr Geyer asked her to meet with the three City Sights operators who were transferring to Toowong to discuss specified matters including "payment for actual work". This evidence appears to suggest that as at 3 September 2013 there was still some doubt or confusion about the remuneration to apply to City Sights drivers transferring to Toowong. Ms Briggs confirmed in her evidence that sometime after 3 September 2013 she spoke to two of the three drivers including Mr Guerrini. She said that one of the drivers was on leave at the time and this driver was not spoken to. [32] Mr Guerrini said that in the last week of August or in the first week of September 2013, Ms Briggs raised with him the matter of different arrangements at Toowong. He said this was the first occasion that he became aware of the drop in remuneration. He said that Ms Briggs called the drivers in individually and informed them that at Toowong they will not be paid in accordance with the broken shifts arrangements but would be paid as a normal driver. He was surprised by this announcement because he thought that Mr Geyer had confirmed that remuneration would remain unchanged during the 31 July meeting. He said at T1-24: "About a week before I went on holidays. About late August or the first couple of days in September the manager - the manager at Bowen Hills depot asked me - wanted to see me and she said to me that you're going to go on holidays so you don't have to worry about this but we're going to be introducing these new pink buses on Tuesday maybe and, by the way, we're just going to be paying you your normal wages, we're going to be paying you by the hour and that's it, and then I just said to her - she said to me how do you feel about that, and I said, well, whatever you think is right and I just - and I just walked out of that office and I just - just did what I had to do and just reported it to the union." -- 9 of 11 -- 10 [33] It was the evidence of Ms Briggs and Mr Geyer that the purpose of the discussions arranged by Ms Briggs was to confirm with the drivers that it was their choice to transfer to Toowong. Ms Briggs agreed that she addressed the matter of remuneration but she did not accept that this was the first time that the drivers knew of the different remuneration structure. Despite references being made to further meetings after 31 July 2013 the evidence does not support a finding that the drivers participated in any further discussions about the transfer to Toowong other than the discussion initiated by Ms Briggs. [34] This evidence points to a conclusion that it was not until the first or second week of September that transferring City Sights drivers knew with certainty that Council did not intend to honour the 1996 agreement following the closure of the Bowen Hills depot. Further Ms Briggs said she did not speak individually with Maurice Carran in early September because he was on leave at the time. It is not clear therefore when Mr Carran was specifically informed about the reduction in remuneration. Beyond these considerations no evidence was led establishing that Council wrote to employees informing them of the changes to their conditions of employment. In all the circumstances I conclude that something less than reasonable notice may have been afforded to all transferring City Sights drivers. [35] What flows from all of this is that while I accept that all drivers knew what changes would be made to their conditions of employment before the cutover date of 14 October 2013, I am not able to fully satisfy myself on the evidence that all drivers received reasonable notice of the implementation of the changes. This is not to say that a balance of probabilities finding in favour of the Council could not be entered, but the element of doubt leads me to conclude that some intervention by the Commission is warranted. [36] There are however limitations on what courses of action may be available. It is not practicable in the circumstances for me to try to turn back the clock of time and direct Council to restart the process. Nor do all the circumstances of this case justify a conclusion to the effect that Council has failed to discharge all of its obligations consequential upon its decision to terminate the agreement. The truth of the matter lies somewhere in the middle and in my view the remedy should reflect a finding on the evidence that Council did set out to provide reasonable notice and to comply with all reasonable consultation obligations, but ultimately its approach was steered off course and less than optimal results were achieved. [37] These circumstances call for a compromise remedy which I am prepared to determine in order to settle the dispute referred to me for arbitration. The remedy arrived at involves extending the terms of the 1996 agreement until 31 December 2013. The effect of this decision is that the three transferring City Sights drivers are to be paid the average broken shift earnings for the Toowong Depot for the period from 14 October 2013 to 31 December 2013. The average broken shift earnings are to be calculated using the same formula as was applied in respect to the same three City Sights drivers when they were employed out of the Bowen Hills Depot (except that the calculation is based on earnings of Toowong Depot employees and that pro-rata payments apply given that the drivers are not engaged full-time on the City Sights service). -- 10 of 11 -- 11 [38] The questions posed for determination are answered as follows: A: The 1996 arrangements created entitlements which arose from the agreement between the parties. In the absence of continuing mutual agreement, these entitlements could not be regarded as having a perpetual life. The entitlements were consistent with the enterprise agreement, or did not breach the enterprise agreement, to the extent that they were not less favourable to the drivers. If the relevant industrial instrument were varied at some future point to include provisions more favourable to City Sights bus drivers, the provisions of the 1996 agreement could not at law displace the provisions of the industrial instrument. B: The employees benefitting from this decision are the three full time City Sights drivers who transferred from the Bowen Hills depot to the Toowong Depot on 14 October 2013. C: The Council was entitled to terminate the 1996 agreement upon reasonable notice and subject to a reasonable consultation process. D: The Council was in substantial compliance with its legal obligations in terminating the 1996 agreement, however the Council process was not without blemish, an outcome resolved by the remedy provided for in this decision. -- 11 of 11 --