Digging deeper into FWO's Atkins Freight Services case

By: Rob McKay


Disagreements on award coverage and family dispute mark background to dispute

 

The Fair Work Ombudsman’s dispute with Atkins Freight Services over driver underpayments may hinge on something as seemingly small as a possible Australian Company Number (ACN) error.

If so, it is anything but minor and, though under appeal, the South Australian Industrial Relations Court (SAIRC) has costed whole problem for managing director Ian Atkins’ mid-sized trucking firm at just shy of $500,000.

The case attracted little attention, even when the initial ruling came down last August, but hit headlines when the Fair Work Ombudsman (FWO) highlighted the fine and various costs, which the court on July 1 totalled at $467,000 for contraventions between January 2007 to 31 December 2009.

At issue is whether eight drivers for Atkins Freight Services, founded in 2000, were covered by the Road Transport (Long Distance Operations) Award (LDD Award) or the Transport Workers (Oil Distribution) Award that had been in effect under a separate company, Atkins Fuels.

Focusing on the legal issues at stake, industrial magistrate Michael Ardlie saw the status of the awards as the nub of the matter but touched on aspects that may give rise to concerns about deeper issues.

"This was not an industry base award but a respondency based award," Ardlie states in his costs and penalty decision.

"Such awards do not exist in the industry anymore.

"In terms of what is required by way of deterrence it is quite clear that the respondent took the view, having been advised by an industrial advisor, that he should pay his employees under the LDD Award.

"The respondent should have checked to see whether he was a respondent to the Award but did not do so.

"The Court should take into account the fact that the respondent received erroneous advice from the relevant Industrial Association, this matter being a matter that is relevant to mitigation.

"The crux of the offending is that Mr [Ian] Atkins omitted, to appreciate the need to and to take the step of, making his business a respondent to the LDD Award."

At one stage, Atkins Freight Services had sought to argue that ACN point but the costs finding states: "The argument was wrong in law because the respondent held the same ACN since its establishment on or about 9 May 1983 and the relevant sections of the Corporations Law stated that altering the name of a company does not create a new legal entity of affect its rights or obligations."

According to Atkins Freight Services, it had been unaware of this linking, or roping in, of awards until 2010 and the Australian Industrial Relations Commission had erred in becoming involved as there had been no dispute as it had had no employees until 1997.

However, "information was obtained that indicated the respondent did employ persons during the industrial dispute period for the 1995 roping in award one of whom Atkins’ brother, Darryl Atkins".

This family aspect and interaction between the employment authorities and Atkins Freight Services came together in 2010 with an unsuccessful Fair Work Australia application by Darryl Atkins, who is not one of the eight drivers in this case, before Fair Work Australia senior deputy president Anne Harrison involving the clash of awards and deputy president Karen Bartel’s approval of Atkins Freight Services’ Long Distance DriversEnterprise Agreement.

With the case still before the courts, it is understood Atkins Freight Services is reticent about commentary on the case.

And an FWO spokesperson tells Owner//Driver: "At the moment we are limiting our public comments on this matter to the media release we have issued, noting that the company is currently appealing the Court’s finding that it has contravened workplace laws."

The outcome will be of serious moment, not just for Atkins Freight Services, but for the South Australian Road Transport Association (SARTA), which has advised the company, and the FWO’s approach, which the company and SARTA have challenged.

Ardlie notes that the company was a ‘first-offender’, there was "not a deliberate attempt to seek to avoid the statutory obligations or award obligations" and that, despite the FWO’s position, the company was entitled to raise defences in arguable matters "in fact and law".

 

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