In a sobering lesson for trucking companies, the Industrial Relations Court of South Australia has ordered Atkins Freight Services Pty Ltd (Atkins Freight), an Adelaide transport company, to pay penalties of $93,000 and back-pay more than $374,000 to 10 truck drivers.
Atkins Freight was paying its drivers in accordance with the wrong industrial award/agreement, which resulted in lower pay for drivers who missed out on additional allowances that are provided in the applicable award.
What happened?
The Fair Work Ombudsman alleged that Atkins Freight contravened a number of terms of the Transport Workers (Oil Distribution) Award 2001 (Oil Award) by not paying drivers in accordance with the Oil Award between January 2007 and December 2009. The drivers also claimed superannuation and interest on these underpayments.
The Oil Award provides allowances for drawing a trailer, meals, travel, shift, overtime, public holidays and paid personal/carers leave.
Atkins Freight was instead paying its drivers in accordance with the Transport Workers (Long Distance Drivers) Award 2000 (Long Distance Drivers Award), except for two drivers who were paid in accordance with a collective agreement which also did not reflect the Oil Award.
The Court found that the collective agreement only applied to one of the drivers and as the remaining drivers were covered by the Oil Award, not the Long Distance Drivers Award, their hourly rate should have had regard to the actual weights recorded on a daily basis.
By paying these drivers in accordance with the Long Distance Drivers Award, it was found that they were being paid less than what they should have been paid if the Oil Award was used. The loss for each driver ranged between $7,355 and $59,993 and amounted to $374,000.
The $93,000 penalty imposed by the Court is likely to have been much higher had Atkins Freight been found to have deliberately underpaid the drivers. The Court accepted that it had followed incorrect advice by an industrial advisor that it should pay its employees in accordance with the Long Distance Drivers Award.
Atkins Freight has since paid this amount to the Court, which is holding it until an outcome is reached in an appeal of the decision. We will keep you informed of the outcome of the appeal.
Lessons to learn
The key message that those in the transport industry can take away from the Court’s decision, is the importance of ensuring that employees are paid in accordance with the correct Award or Agreement, otherwise they can expect a costly battle in Court and face back-payment obligations and a severe fine.
Rigby Cooke Lawyers regularly provides employment advice to businesses within the transport industry and can assist you with any queries you may have including correct award/ agreement coverage.
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