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Campbelltown AST Meeting

QUESTIONS about categories.

What is Phillip’s current understanding of the new method?

What is David’s understanding of the contract clauses?

When was the decision made to pay by student numbers?

Who interpreted this method and made this decision?

Who writes the contract?

What date was the current contract (including amendments) finalized?

Why wasn’t this change added to the final contract?

Why was the below clause added to the amended current contract?

18. PRICE BASIS

18.1 Payments will be calculated based on the vehicle category and the total distance travelled daily as set out in the Schedule of rates at item 4 of Schedule 1 to this Agreement for loaded kilometres. Distance travelled will be calculated by the shortest practicable route between the student’s homes and their school/s

Why is this unfair and unjust method used to increase efficiency, when efficiency is ill managed in other areas?

This clause not only validates the general consensus, it reinforces it?

Staff say “It’s all new this year” – What is new in this contract?

WHO is Management at Wollongong?

Who was the director?

Do staff get paid commission if program is under budget?

 

Questions on Operations with Categories.

  • Why were operators allowed to accept runs after being given “wrong” information in the contract?
  • Why were operators not informed of their lower category prior to the end of the first term?
  • Why were operators only informed if they questioned their payment?
  • Why were operators requests for explanations and documentation refused?
  • Why are individual cases that staff “referred to management” still not responded to?
  • Why are some operators being paid their correct category while others are not?
  • Why is there so much inconsistency between operators with its implementation?
  • Why is there so much inconsistency with “run category”? (Runs having the same amount of students but categorized differently)
  • Why was this method, which potentially could have again crippled the program, implemented at such a critical time for the ASTU and the DEC?
  • Why were operators advised publicly that their rates would rise then advised privately that their rates would actually be substantially less?
  • If in fact the department truly believe this method is fair and just and contractually legal, why did they deliberately avoid requests for explanations from operators?
  •  If it is known and understood by operators, how do they explain the volume of calls and emails from upset, angry and disillusioned operators?
  • If this method is a genuine and legal part of the contract, why are those who go to their local MP’s or the Minister’s office, promptly having their category corrected and also reimbursed their back pay?
  • Why are so many vehicles NOT maximised to their capacity when multiple small runs (primarily taxis) having one to two students, attend the same school and pick up at the same locations as the larger vehicles that are now having their categories downgraded?
  • If the department can now pay a lower category rate when student numbers drop to any operator regardless of the category they tendered in,  WHY is this not allowed in reverse?
  • In fact, does this negate all validity to original categories tendered?
  •  Can any operator now be given a run in any category at any time?

If this method was always available to be used:

1)    Why are so many Operators unaware of it?

2)    Why was it not utilised in previous years?

3)    If in fact it WAS used in previous years, why are so many operators unaware of this method?

4)    Why in previous years were category payments not raised when operators transported many more students than their vehicle capacity?

5)    Why did pay staff NOT change the categories if this method was used in previous years?

 

DUE DILLIGENCE (At the St George Pre-Tender Briefing)

Where to write price for wheel chair category?

Answer – You need to put it into the higher category – the Wheelchair capacity and use that one and that becomes the rate.

Question – So what happens if you don’t give us kids that use the wheelchairs – what rate?

Answer – The rate that you tendered for.

Question – even if it’s a wheelchair one?

Answer – The Department can’t change the rates under this tender.

OK, if you’ve put in for a vehicle that’s got ….umm   4 capacity, and you’ve tendered in this area here, and you’ve provided no other, other rate, then the runs are allocated according to that rate that you’ve put in.

The department cannot come back to you and say, “we’re only going to use your seats, so, tell us what you’re gonna have for that category and we’ll pay you that”.

“That’s not part of this tender.”

Tendering in 2 Categories.

Question…………the run changes for maybe a couple of months, am I being forced to use my sedan rate if I submit it or, you know what I mean, I could go for 3 months driving at the higher rate and then forced to use my lower rate or am I best off not putting in a sedan rate on the same tender?

Answer – The department will allocate runs on the vehicle capacity so it is not related to the number of students…..

Question …………am I still able to get the rate for that car even though the car is not filled or do I have to drop to my lower rate and be forced to use my sedan rate because my run size has changed?

Answer ……….. we still pay you on that rate; we are not going to convert to a sedan rate or lower rate.

Question – I know you do now but I was a little bit concerned……….I may be kind of forced to.

Answer – No, no the same rules will apply.

 

CLARRIFICATION

  •  Is there now an obligation for operators to maintain multiple vehicles for each category so as to be compatible with this operational system?
  • If there is no obligation for multiple vehicle ownership, what is the time frame allowed for purchasing arrangements when Run Categories change with varying student numbers.
  • What notification will be provided to the Operator with each change in “Run Category”?
  • Will the Operator be given timely notification if unable/unwilling to accept the new category?
  • If an Operator has no choice but to surrender their run due to the Category change and a replacement run cannot be offered will there be a 28 day reimbursement?
  • Now that the Tendered Categories have been abandoned can a contractor now also be “offered” a run in larger category than originally tendered?

COMMERCIAL EXAMPLES

If I hire a 6 Tonne truck from Thrifty Rentals for $244.31 and my furniture only required half of the space, would Thrifty allow me to only pay them the price of $184.28 that they charge for their 3 Tonne truck?

If I rented a 4 bedroom house but intended to only use one bedroom would the market value rent then be reduced?

If I hired a meeting room to accommodate 100 people and only 10 people arrived would the price be charged at the rate of a smaller meeting room?

And the list goes on……………

 

INCONSISTENCIES

Are people who tendered in a single category entitled to still be paid in that category regardless of the amount of students assigned to their run?

If YES – why is this only pertaining to some operators while others are still experiencing the category lowering?

If NO – Why are some operators being paid at the higher rate, yet have fewer students than lower paid operators?

Eg. Two People Movers operators – one having 2 students and being paid People Mover Rates, while the other has 4 students being paid Sedan Rates.

Why did Garry Browne agree to reimburse those with rolled over runs who tendered in a single category, even though he claims that at any time they also can be paid in a Sedan Category?

Why did Garry Browne REFUSE to reimburse those with rolled over runs who tendered in more than one category, since in fact, they are in exactly the same position as a single category tenderer?

Why are SOME single category tenderers with rolled over runs being reimbursed while others are not?

Why are SOME multi category tenderers with fewer students having their higher category payment honoured, while others are not?

Why are staff, when given the same circumstances from inquiring operators, giving totally different determinations, attitudes and answers to the same question.

EG. .When asked why their category had dropped, one operator was angrily told “I am telling you, that’s the way it is” as opposed to the other, nicely told “No, that’s not right, I’ll fix it for you”. This implies that favouritism is rife.

Two Parts – Tender or no Tender

If “Category Sliding” is now only to be done for those who tendered in more than one category, again, WHY WAS IT NOT MADE CLEAR AT THE PRE TENDER BRIEFS OR IN THE PROCESS CONTRACT?

Lady……….I could go for 3 months driving at the higher rate and then forced to use my lower rate, or am I best off not putting in a sedan rate on the same tender.

Answer – The department will allocate runs on the vehicle capacity so it is not related to the number of students…..

WHY ARE OPERATORS NOW BEING PENALISED FOR OFFERING MORE THAN A SINGLE CATEGORY?

 

Example of Losses when Vehicle Categories are Lowered

2012 Minimum Costs (see workings below)
Minimum Wage Per Day

96.4

Vehicle Capital and Running Costs

83

Minimum needed per day

179.4

(This does not include admin/office/accountant/phone)
Examples for a People Mover
(Note: Running costs based on 15000 km’s per year. Unpaid km’s are generally 100 to 120% of Paid km’s.)
Current Rates
People Mover at 39 km’s

183.27

Minimum Costs needed daily

-179.4

Operator’s Balance

3.87

Sedan at 39 km’s

144.71

Minimum Costs needed daily

-179.4

Operators Daily LOSS

-34.69

1st Term Rates
People Mover at 39 km’s

152.98

Minimum Costs needed daily

-179.4

Operators Daily LOSS

-26.42

Sedan at 39 km’s

120.56

Minimum Costs needed daily

-179.4

Operators Daily LOSS

-58.84

Workings for Costs (Wages – Passenger Vehicle Award. Vehicle – NRMA Operating Costs)
Wages
Casual Grade 2 PV Award per hr

21.42

Super at 9%

1.93

Workcover at 3.5%

.75

Total Per Hour  ——————————-

24.10

Award Minimum Daily = 4 hrs

96.4

(2 hrs per engagement)
Vehicle Costs
Tarago Operating Costs

48

(NRMA  calc at 15000 Km’s per yr)
Tarago Capital Costs

35

(2007 model at $30,000 at 13% interest over 5 years)
Total Minimum Vehicle Costs

83

 

More On Costs
Note: A single run operator would still be entitled to the same minimum wage, but a
saving could be gained in operating costs based on private use. Though I can hardly
see why any middle aged operators would have a private use component in the purchase
of a Mini, Maxi or Wheelchair vehicle. Therefore most are PURPOSE bought assets.
Meaning – the above minimum would generally be valid for the majority of operators. This
would mean ALL operators on lower klms (other than Taxi Companies) are suffering losses
Note: Capital expenses on a Purpose Bought Asset in ANY business is to be taken over
the entire year, NOT just over the sum of days the asset is utilized or the percentage
of its daily use. This methodology used in the original rate structure is Ludicrous.

(As a matter of Interest.)
2011 Rates for large Majority
A common 2011 Daily Rate

100

(Generally 50 to 60 klms would fall under the daily rate)
Minimum Costs Needed

174.9

(less CPI Increase)
Operators Daily LOSS

74.92

Operators have waited since 2007 to be paid a reasonable rate with many suffering HUGE losses each year. After all that time, then to discover the Department are to begin a new strategy to reduces costs by lowering categories is further insulting.

THREATS

There is indisputably NO security for any operator with the ASTP. This is made abundantly clear throughout the entire contract. Operators take huge risks with their large outlays for vehicles. A run may or may not be offered. A run may or may or may not continue. A run may or may not attract kilometres. A run may or may not roll over. I can’t think of many businesses that offer such little security. Now, with this new payment structure, security is even more diminished. An operator cannot now even rely on the amount they reluctantly accepted when their tender offers were abandoned.

These rates were designed both by the Procurement Department and Chris Raper based on a structure that contributes toward the necessary extra expenses involved in purchase, modification and running costs of larger vehicles. There is no point in this structured payment method now payment is virtually paid per student. The vehicle still attracts the same expenses whether it is to its capacity or not.

Relying on the desperation of operators already committed to these overheads by giving them no option but to accept lower category rates is abhorrent behaviour.

The continual risk of losing a run is enough concern, but to not know from one week until the next what category will actually be paid, or what kilometres the Department will allow is unnecessarily callous.

This controlling “take it or leave it” attitude is shameful. Public Servants can rely on their own regular income yet feel the need to deprive operators at every opportunity.

TIMING and PUNISHMENT

What date did this Category Lowering Decision start???

This date is CRITICAL in ascertaining the depths that the ASTU will go to in retracting rightfully earned money from operators at any opportunity they can.

The “incident” at the start of the year was primarily caused by runs being unsustainable. Students were without transport so a speedy decision was made by the Director General in the interim to raise the minimum to 30 klms to sustain the program. At this same time someone UNDERMINED this decision and chose to reinterpret clauses in a way to CLAW BACK these funds. Unbeknown to operators, their promised rate rise was already being eroded yet they WERE NOT INFORMED until after the work was performed. Most of these operators were already running at a loss but considered the students well being and persevered at these low rates only to be “shafted” once again by the ASTU.

We don’t believe the Minister for Education would have suggested this move for fear of derailing the program again. Therefore, this malice decision had to have been made by someone else. Either from the ASTU, Shared Services or Finance and Infrastructure.

It must be made clear that it was NOT the operators who “winged to the media”, it was the parents. The operators used this unexpected publicity to finally have a voice after YEARS of mistreatment. We should NOT be punished by those in the DEC who perhaps were chastised for their earlier failings.

When you read the Boston Report and the subsequent proactive release documents, it becomes evident that this Unit is a “law unto themselves” No one of authority or business experience oversaw even the mammoth task of the Tender process let alone its daily operations. This ineptness and aloof detachment by the DEC has undermined this program for years.

It is Treasury that is ultimately responsible for knowingly allowing Operators to work for years at sub standard and illegal rates and insisting that the existing budget not be compromised. Even after the stern request of former NSW Department of Education Director of Finance Ken Dixon, Treasury chose to ignore his advice and proceeded to fail in its duty of care. The ASTU’s disrespect of operators plus its lack of knowledge in business finance and procedures is still the underlying problem.

Many mistakes were made through this whole Tender process including those still causing the current unrest and dissatisfaction. None of these mistakes are the fault of the operators who did everything that was asked of them, including running at huge losses year after year until the RFT arrived. Operators did their due diligence, prepared their tender response, waited the extra time caused by the Taxi Council and continued working in good faith through much chaos at the start of the year.  Yet, it is the operator who is still suffering.

SOLUTIONS

Operators acknowledge and understand the need for flexibility with runs and that the Department will organize them “……by the most effective means available….. to increase efficiencies…….” BUT, since run organization is not in the control of the operator, the Department must also bear some of the risk.

For efficiency, the Department would be better to select the most appropriate vehicle and contractor taking into account the many aspects that may affect the run. They should look at the history of the run or school to establish the likelihood that fewer students may only be temporary. Some suggestions:

1)    If a run has consistently been a particular category over a number years, then a determination should be made as to the likelihood of it regaining students in the near future and thus avoiding unnecessary disruption to the students, schools, operators, drivers and admin staff at the unit.

2)    If the run is new, a good estimation of future students could be made by phoning the school to ask if this is likely. (Often teachers know in advance)

3)    If the Unit is new to the school chances are very high that students will be needing transport. If the expense of a new unit and staff is allowed by the DEC then it would logically follow that it has opened due to demand. (Ask my personal example of attempts all year to explain this probability)

4)    If a run appears to be consistently low in numbers and confirmation is gained that it is unlikely to grow in the immediate future then notice should be given to the operator that the run will be cancelled at the end of the term. The Department would then need to source a smaller vehicle with preference given to the first operator to have their run replaced at the first opportunity. (NOT simply choose the easier way and pass on new runs to larger operators – this action may seem the best at the time but it will ultimately dwindle down the smaller operators, who the Department have said offer the best service.)

5)    Student addresses should be looked at more carefully when arranging a new or even existing runs. Many times more than one operator will arrive at, or pass by the address of a student travelling to the same school.

6)    Maximising vehicle’s to their capacity would be preferable with taxi’s being used to “take the flak” for haste while student numbers stabilize and accurate allocating is sorted.

When a “run” category changes, the operator’s “vehicle” category should not. It is the run that needs to be cancelled and then re allocated to an appropriate vehicle. The department should NOT rely on the desperation of Operators by expecting them to run larger vehicles for the convenience of the Department.

LEGAL STUFF (Not Submitted)

Treasury

Why does the ASTU and the DEC continue to neglect their DUTY OF CARE and use every avenue possible to retract rightfully deserved money from operators?

It is against the law for ANYONE to pay:

1)    Less than what it takes to perform the task.

2)    Less than what can otherwise be earned as an employee.

3)    Amounts that would see a contractor working at a loss.

The Fair Work Ombudsman has accused Coles of underpaying trolley collectors and is taking the supermarket giant and three contractors to court.

“……………..knew the sub-contracting price would result in paying the six less than the minimum wage.

The claim alleges Coles was wilfully blind to the underpayments and did not take action to prevent them.

Fair Work Ombudsman Nicholas Wilson says the amount of money and the vulnerability of the workers were decisive factors in the decision to prosecute.

Estoppel by Conduct

Estoppel by agreement or convention

The first sub-category is estoppel by agreement which is sometimes called estoppel by convention. This is where two parties have agreed as to an existing state of facts. They may have agreed that the facts are other than they really are, but if they have both agreed, then each is estopped from denying the state of facts as agreed. This type of estoppel can also arise if there is simply a mutual assumption without any explicit agreement.

Estoppel by representation

Here we are talking about a representation made by one party to the other which the latter has relied on. We will see later in the course that there is a great deal of law to do with misrepresentation in its various forms. One major area we must look at is the effect on a contract of a misrepresentation which is made during negotiations for a contract. Here we are concerned more generally with the situation: one party makes a representation to the other and then wishes to deny the truth of that representation. The effect of an estoppel, as always, is that the person who made the representation may be estopped from denying the truth of it.

Unconscionable Conduct

  • Section 22 provides a list of factors that the court may consider in determining whether unconscionable conduct has occurred, including:
  • the relative strength of the bargaining positions
  •  the imposition of unnecessary conditions
  •  whether a party was able to understand the documents
  • whether any undue influence, pressure or unfair tactics were used
  •  whether the conduct was consistent with other dealings
  •  whether the stronger party failed to disclose any intended future conduct that       might have affected the other party’s interests
  • whether the stronger party was willing to negotiate
  • whether the stronger party had the power to unilaterally vary a term or a  condition   of a contract between the parties for the supply of goods or services
  • the extent to which the parties acted in good faith.

Negligence Actions

Actions against Principals for negligent misstatement can be brought where the

Principal has represented that it would conduct the tender process in a certain way

(which is not followed) and the tenderer shows that it relied on the representation

to its detriment in deciding to submit a tender. To succeed on this basis, the

tenderer would need to show (amongst other things) that the Principal owed it a

common law duty of care.

TPA section 52 prohibits a State authority from engaging in misleading or deceptive

conduct. What is ‘misleading or deceptive’ is a question of fact, but the issue of

whether a State authority intended to mislead or deceive is irrelevant. S42 of the

Fair Trading Act 1987 (NSW) could also apply in circumstances where there has

been misleading or deceptive conduct.

Section 52 of the Trade Practices Act 1974 provides that “a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.

Section 4(2) of the TPA provides that warranties (ie promises) made in contracts

(which would include the type of preliminary or ancillary contracts described above)

amount to “conduct” for the purposes of the Act. If the warranties are false or

misleading they will breach section 52.

 

 

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