Toll wins appeal to have unfair contract case reheard, potentially saving it from compensating nine owner-drivers almost $400,000
By Brad Gardner | May 21, 2010
Toll Holdings has won its appeal to have an unfair contract case reheard, potentially saving it from compensating a group of owner-drivers almost $400,000.
The full bench of the NSW Industrial Relations Commission quashed last year’s ruling of Justice Conrad Staff and referred the matter to another court.
Staff in March 2009 had ordered Toll to compensate nine owner-drivers, saying the company breached its obligations to them following its purchase of Brambles Transport in 1996.
Brambles allowed owner-drivers to sell their vehicles and positions—known as goodwill—and when Toll bought the business it issued a letter informing the sub-contractors all benefits would be transferred over.
But Toll did not include the clause in the owner-drivers’ contracts because of its policy against goodwill. It refused to allow the owner-drivers to sell their vehicles and positions, leading Staff to say Toll “unconscionably departed from the representation which it had made…”
However, the full bench ruled the clause was included in the contracts and Staff failed to determine if Toll’s actions were unfair in that context.
“It is clear from the proceedings at first instance that inadequate attention was given to whether the contracts were unfair in circumstances were cl 11 [ the clause] was in the contracts,” Justice Roger Boland wrote in his judgment.
“…the trial judge dealt with unfairness on a different factual basis to that which has been found on appeal is the proper factual basis (that is, the contracts include cl 11)…”
Boland says the judge will determine whether to uphold Staff’s order of compensation, which included a $67,000 payout to Len Felice and a $56,500 reimbursement to Nick Kouverianos.
The remaining seven owner-drivers were to be paid between $18,000 and $55,000.
Prior to buying Brambles, Toll gained a warranty from the company stating there were no arrangements for goodwill payment.
But while ruling that Toll may have been given the inference it was protected against the clause, the full bench says Toll’s subjective belief did not excuse its contractual obligations.
Staff ruled that Toll had a responsibility to the owner-drivers because it failed to inform them of its policy before purchasing Brambles.
“In these circumstances, the owner-drivers should be compensated for what they were denied, that is, the right to sell their trucks with work in circumstances which were not lost to them,” Staff ruled.
Felice had organised to sell his truck and position for $95,000 in January 2004. He wanted to leave the industry to care for his family after his wife died of cancer.
Toll blocked the sale and also refused to employ Felice’s potential buyer if the sale went ahead. Felice left Toll in July 2004 and sold his vehicle for $30,000.