Compensation looms after Toll's 'deception' is brought undone

Date: 20.04.2012

Toll faces potentially massive payout to a group of owner-drivers after losing long-running legal stoush stemming from purchase of Brambles

By Brad Gardner | April 20, 2012

Toll is facing a potentially massive payout to a group of owner-drivers after losing a long-running legal stoush stemming from its purchase of Brambles in 1996.

The Industrial Court of NSW ruled in favour of nine-subcontractors in their unfair contract claim against the transport and logistics operator, opening it up to a compensation bill that could hit around $400,000.

The drivers, who moved from Brambles to Toll as part of the sale, began legal action against Toll in 2005 after it refused to grant them goodwill – a practice whereby drivers sell their trucks and positions.

Brambles permitted goodwill and when the owner-drivers transferred to Toll they were told in a letter their employment conditions "will be no less favourable than those currently applied to you".

This was despite Toll having an unwritten policy against goodwill. It never told the owner-drivers but when they tried to sell their assets and position Toll stepped in and stopped it.

Justice Wayne Haylen says Toll had an obligation to "frankly and openly" inform the owner-drivers about its stance on goodwill but instead chose to ignore the problem.

"If Toll had made its policy clear to the drivers prior to sale, at least drivers would have then been placed in the position of being able to decide whether they would accept engagement by Toll under these changed conditions," he says.

"Toll must now bear the cost of the consequences of its harsh and unconscionable conduct in this regard."

Haylen says the contracts of the owner-drivers who have since left Toll should be declared void. Those still hauling goods for the company will have their contracts varied to permit them to sell their trucks with work, subject to Toll being satisfied the new driver can perform the duties.

The Industrial Court ruled in favour of the owner-drivers in 2009. Toll in 2010 appealed for case to be reheard.

In the original matter, the court ordered Toll to pay the group of owner-drivers more than $392,000 in compensation, with one owner-driver to receive $67,000.

Haylen says the Industrial Court will base its decision on the payments set out in the original decision but also told all parties to discuss the issue.

"It should be made clear to the parties, however, that discussions as to appropriate money orders…should not compromise either party in relation to their appeal rights," he says.

During the lead-up to the sale of Brambles, Toll sought an assurance that there was no goodwill in place. It did not receive an ironclad guarantee, and Haylen says Toll should have known the practice existed because the owner-drivers’ contracts had a clause dealing specifically with goodwill.

Haylen says Toll, anxious to ensure continuity of drivers familiar with the runs and customers, gave the group of nine the impression its terms and conditions would not change.

He says the owner-drivers relied on Toll’s undertakings when deciding to move from Brambles to its new owner.

"By this deception, Toll secured for itself a most valuable commercial advantage," Haylen says.

He says company’s desire for continuity was understandable but "Toll should not have allowed the attainment of that commercial goal to impede a full disclosure of its no-sales policy to the drivers before they agreed to be engaged by Toll".