Trucking company blames unpaid wages on fiercely competitive contract tenders.
A Western Australian trucking company has confessed to ripping off its truck driver so it could lower its costs to remain competitive.
The Fair Work Ombudsman (FWO) discovered underpayments totalling $20,000 after the affected truck driver approached the agency about unpaid wages.
It says the driver was not paid for loading or unloading his truck for four years and had been underpaid his cents-per-kilometre rate and living away from home allowance.
The company, based at Midvale, admitted to the FWO it underpaid its driver because the only way it could remain competitive was to cut its wages bill.
It claims tenders for new contracts are fiercely competitive and lower prices can only be achieved through lower wages.
Ombudsman Natalie James says employers cannot undercut employees’ wages and entitlements to try and gain an unfair advantage over their competitors.
“Businesses must pay their employees for all time worked, including any time spent preparing or packing up at the start and end of a shift,” she says.
The trucking firm paid the employee what he was owed, after the FWO intervened. It decided not to prosecute the company, meaning the name of the business has not been revealed.
However, James says the company has been put on notice that enforcement action will happen if it breaches its workplace obligations again.
James has also put the onus on businesses outsourcing work to transport companies, saying contracts must not come at the expense of underpaid employees.
“All parties should undertake due diligence when outsourcing work, particularly to lowest cost providers, to ensure lower costs are attributable to efficiencies in the business and not the potential underpayment of workers,” she says.
The Fair Work Act allows the FWO to chase someone other than the employer who is involved in a contravention of workplace laws.
The agency says it is increasingly using the clause, known as section 550, in the Act to go up and down the supply chain to scrutinise subcontracting arrangements.
James has warned that companies found to be profiting from underpaying workers face a “very real risk to reputation and impact on their bottom line”.
The case of the Midvale-based transporter comes in the wake of FBT Transwest boss Cameron Dunn’s concerns about the actions of companies putting contracts to tender.
Dunn says trucking firms are being put on 120-day payment terms and face the prospect of having their rates reduced if they do not meet key performance indicators.