Operating costs rise as new financial year begins

Running costs set to rise significantly tomorrow due to higher wage payments, new awards system and increased road charges

Operating costs rise as new financial year begins
Operating costs rise as new financial year begins
By Brad Gardner | June 30, 2010

Trucking operators’ running costs are set to rise significantly tomorrow, as higher wage payments take effect alongside a new awards system and increased road charges.

More than 120 existing transport employment awards will be whittled down to three, as the Federal Government’s new awards system is introduced.

The Road Transport and Distribution Award will cover most of the trucking industry, with long haul operators being bound by the Road Transport (Long Distance Operations) Award. The cash in transit sector has a separate award.

Unless employees are currently working under an existing agreement, they will need to move to the new awards.

The new awards were due to come in on January 1 this year but were delayed for six months to give businesses time to adapt.

The Long Distance Operations Award classifies payments into eight grades, with drivers paid according to the grade they fall into.

Grade one covers drivers of two axle rigid trucks capable of hauling eight tonnes, while grade eight applies to multi-axle trailing equipment.

Although the Award lists the wage for each grade, operators will need to add an extra $26 due to a decision earlier this year by Fair Work Australia to increase the minimum wage.

As such, a driver in grade one to be paid $600.60 a week will need to be paid $626.60 a week while a driver under grade eight will receive $710.70 despite the Award listing the wage at $684.70.

The Award also lists eight grades of kilometre rates and hourly driving rates, which vary depending on the type of work the driver is performing.

Operators will need to factor in the minimum wage increases to the kilometre rates. The 4.3 percent rise to the grade one wage means the grade one kilometre rate will go from 31.23 cents to 32.58 cents.

Allowances are also listed in the Award.

"Where an employee is engaged on loading or unloading duties, that employee must be paid for such duties at an hourly rate," the Award states, adding that allowances must also be made for overtime, travelling and training.

The Road Transport and Distribution Award lists 10 grades of minimum weekly wage rates, from $577.60 to $684.70. The extra $26 must also be applied to each grade.

Drivers must be given allowances for travelling, the type of vehicle they are driving and for loading and unloading certain material.

The Award covers a broad section of the industry, such as general hands, freight forwarders, distribution workers, radio operators and forklift drivers.

It also lists the minimum wage that must be paid to junior employees.

Wages in NSW will decline by 20 percent each year over five years to bring them into line with other jurisdictions.

From July 1, operators will need to apply an 80 percent transitional rate for employees moving from the NSW Transport Industry (State) Award to a modern award.

The rate will fall to 60 percent in July next year, 40 percent in 2012, 20 percent in 2013 and nothing from July 1, 2014.

"Changes to minimum wage entitlements are effective from the first full pay period on or after 1 July each year up until 1 July 2014. Therefore, transitional wage rates need to be re-calculated each year," the Chamber of Commerce and Industry Queensland says.

The Award requires operators to work out how much they need to pay a driver by matching the grade in the State Award to the grades in the new awards.

For instance, a driver of four-axle rigid vehicles falls into grade 4 of the State Award compared to grade 3 of the Road Transport (Long Distance Operations) Award.

"To calculate an employee’s transitional wage rate, employers need to first identify the employee’s pre-modern award and modern award classifications," the CCIQ says.

Operators will need to work out the pay difference between the grades and then apply 80 percent to the difference.

The figure is then added to the wages that must be paid under the new awards.

The Transport Workers Union tried to have NSW provisions extended nationwide, claiming the proposed awards would have a negative effect on pay, annual leave, overtime and redundancy

"The pay rates and conditions in the draft awards will cause significant disadvantage to employees to be covered by the awards who are located in NSW," the union wrote in its submission to the awards modernisation process.

The Australian Road Transport Industrial Organisation (ARTIO) says NSW rates are around 10 to 15 percent higher than other jurisdictions.

However, employees may apply to Fair Work Australia for take home pay orders to ensure their wages are maintained at the current level.

Liberal Senator Eric Abetz claims new companies set up from July 1 will be able to exploit the provision because they will not be bound by take home pay orders.

"If I were a new entrant into the field on 1 July, I could pay all my brand new employees in my brand new business at the level of the new modern award and, therefore, undercut the competition," he says.

Changes to the awards system comes amid a rise in road charges.

The fuel excise and state-based registration fees will increase by 4.2 percent.

Almost one cent will be cut from the diesel rebate, meaning it will be 15.54 cents from tomorrow.

The cost of registering a B-double will jump by more than $3,000 to $15,340. A six-axle semi trailer will cost $5612.

Governments justified the increases based on a 10.7 percent rise in expenditure on the road network.

• Click here to access the Transport Industry (State) Award
• Click here to access the Road Transport and Distribution Award
• Click here to access the Road Transport (Long Distance Operations) Award
• Click here to access the Transport (Cash in Transit) Award

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