Payroll overhaul causes headaches for Linfox

Dispute flares between TWU and Linfox after the company uncovers "erroneous" payments to staff upon overhauling its payroll system

By Brad Gardner | March 28, 2012

A dispute has flared between the Transport Workers Union and Linfox after the company became aware of "erroneous" overpayments to staff upon overhauling its payroll system.

Linfox says it discovered its drivers were receiving up to double-time payments for meal breaks taken while working overtime under its old system.

It recently introduced a standardised model to replace the different pay methods across its network of depots, which has led to all drivers now being paid at ordinary time rates.

The union wants the company revert to the old system for affected drivers, who complained when they realised their pay had been cut.

Linfox refused, prompting the TWU to seek an order from Fair Work Australia in its favour until the dispute was settled. It also wanted drivers reimbursed for any loss of pay.

But Fair Work Senior Deputy President Anne Harrison declined to grant the union’s wishes. During proceedings, Linfox argued the previous pay structure was wrong and it should not continue.

"Linfox held the view that it did not wish to make payments which it believes are erroneous," Harrison says in her written judgement.

"It did not realise the extent to which it had been overpaying for crib breaks in overtime hours."

Linfox Human Resources President Laurie D’Apice told Fair Work he was "shocked" upon learning the level of payments that had been made to employees.

Harrison says the company did not consult with the TWU or individual employees about the impact of the new payroll system. However, Linfox says it was unaware of the issue until the union raised it.

"Linfox accepts that the result of the introduction of [a] new payroll system is that some employees wages have reduced in that they had previously been paid for the relevant breaks at time and a half or double time," Harrison says.

"It did not know this would be a consequence of the introduction of [a] new payroll system; it was taken by surprise."

The new system was implemented in mid to late 2011 and the TWU raised its concerns with Linfox in October.

"When the TWU raised this dispute with Linfox it requested that the method of payment be changed back to that which applied prior to the implementation of the new system," Harrison says.

Linfox says it will reimburse affected employees if it incorrectly interpreted the payment methods. However, it told Fair Work Australia it would be administratively difficult if it was ordered to revert to the previous payroll system.

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