SARTA renews hostilities after SA company lose appeal on deeds of settlement
The Fair Work Ombudsman (FWO) has hailed the outcome of an Industrial Relations Court of South Australia (IRCSA) back-pay appeal case involving Atkins Freight Services.
But SARTA executive director Steve Shearer has renewed his attack on the FWO over its approach to the case in response.
The original case related to driver underpayments between 2007 and 2009 centered on which Award 10 of its drivers had been paid under and Atkins was backed publically by the South Australian Road Transport Association (SARTA).
In a September judgement that went largely unnoticed, the court backed an industrial magistrate’s ruling that 2012 ‘deeds of settlement’ worth $10,000 and $4,750 between the company and two of the drivers failed to shield the company from liability for wages repayments.
Neither did it shield the firm from the FWO, as the FWO was not a party to the deeds.
This part of the Atkins position involved in part on the WR Act’s Section 720, which gives the FWO a six-year window in which to sue for any underpayment.
The judge ruled that FWO was acting to enforce the FW Act, which is its role, rather than representing the drivers.
He also deemed the deeds as being too vague to be construed as a settlement of the claims in the case and that the deeds “contravene the principle that it is not open to parties to contract out of award obligations”.
The deeds “refer to a lump sum payment. When that kind of payment is made, it is important to identify the particular award entitlement to which it relates.”
On other aspects of the appeal, the judge states that the company had failed to argue its position to any effect and this was due to an extent to the ‘leading’ nature of the nature of the evidence given.
“In litigation, the principle generally applied is that it is the party asserting the affirmative case who has the onus of establishing that case. ‘He who asserts must prove’,” the findings read.
FWO’s positon
The FWO says the IRCSA had penalised the company a total of $93,000 and, in addition, ordered it to back-pay the 10 truck drivers their outstanding wages, plus superannuation and interest totaling $374,487.
However, after Atkins Freight Services lodged an appeal, the company paid about $468,000 to the court, which held the funds in trust pending the outcome of the appeal.
After dismissing the appeal, the Federal Court made orders late last year allowing for the money to be released from trust and paid to the truck drivers.
The truck drivers have now received back-payments ranging from $8,012 to $91,566.
Fair Work Ombudsman Natalie James says the case highlights that her agency has the ability to recover lawful minimum entitlements owed to employees, even where employers attempt to unlawfully contract out of their obligations to pay them by entering into ‘deeds of release’.
“We carry out enforcement work in the public interest,” James says.
“Any private arrangements that employers make cannot prevent the Fair Work Ombudsman from taking appropriate action, in accordance with our enforcement and compliance and litigation policies. It is important that employees know they can always seek our assistance.
“We will take enforcement action and seek penalties and full back-payment of entitlements in situations where we believe doing so will change employer behavior and build a culture of compliance.”
“The simple reality is that Atkins, even by the FWO’s own admissions, were paying their drivers correctly for the work they were doing under the Long Distance Award.”
SARTA cracks back
The appeal ruling did note that the period of underpayment straddled the transition from the Workplace Relations Act 1996, within which the Transport Workers (Oil Distribution) Award 2001 sat, and the Fair Work Act 2009.
This is a point Shearer, who has been highly critical of the FWO through the case, amplified in response to the FWO announcement.
“The problem was an unreasonable technicality through which the business was unbeknown to them, tied to the old out dated Oil Distribution Award, purely because when the new Adelaide based long distance business was set up their old ABN from the local regional fuel delivery business that they sold off and which kept operating,” Shearer tells ATN in a written response.
“So the FWO in the most belligerent of attitudes, nailed the company on the basis that the old ABN meant they had to pay under the old Oil Distribution Award. If the business had used a new ABN, doing precisely the same work, there would not have been any issue . . . and the FWO acknowledged that.
“This was a disgraceful application of an absurd technicality when by any reasonable analysis, the work was properly being performed and paid under the Long Distance Award.
“I was personally horrified at the ineptitude of several of the FWO investigators who just kept committing appalling and fundamentally wrong assessments based upon flawed analysis, rampant and false assumptions and all driven by an obvious desire to persecute the company. I repeatedly dismantled their calculations and false assumptions and they just went back to the drawing board looking for another angle.
“Interestingly the attitude of the FWO changed dramatically and became very aggressive after a former employee politicised the case with the then Labor Minister for IR.
“In my personal opinion, I consider, in my long experience, that the FWO’s approach was despicable and unprofessional and amounted to a vendetta, seemingly at the behest of then then Labor Minister for Industrial Relations.
“So let’s be very clear, if the company had been set up with a new ABN, there would have been no case at all because the drivers work was being correctly and appropriately paid for under the Transport Workers (Long Distance Operations) Award.
“This was NOT a case of underpaying for the work being done and in fact Atkins paid above the required rates.”