The demise of the road transport and distribution award?

By January 20, 2015 From the Courts No Comments

In a decision with major implications for employers employing delivery drivers, a Full Court of the Federal Court (in Transport Workers Union of Australia v Coles Supermarkets of Australia Pty Ltd [2014] 3 November 2014) determined that:
• Coles’ employee delivery drivers or Customer Service Agents (CSAs) are covered by the Road Transport and Distribution Award 2010 (Transport Award);
• the CSAs are also covered by the General Retail Industry Award 2010 (Retail Award); and
• as the relevant classification under the Retail Award is the most appropriate to the work performed by the CSAs and the environment in which they work, the Retail Award and not the Transport Award applies to them.

The court also determined that two Coles retail based enterprise agreements (EAs) did not cover the CSAs.
The CSAs, a relatively new category of employees for Coles, were employed following the establishment of online shopping and Coles’ online website. Prior to that, Coles contracted out delivery driver work to transport providers, including Linfox.

Modern award coverage has significant effects for employees and employers including not only the provision of minimum terms and conditions of employment but also a base line for the better off overall test in making enterprise agreements.

It is often the case that an employer may be covered by more than one award. Traditionally, the approach taken by the courts in determining which award applies in such circumstances is to consider the major and substantial purpose of the work being performed.

The approach taken by the courts in determining which award applies for modern awards is: what is the award classification which is most appropriate to the work performed and the work environment?

Interestingly, it was noted that the primary function of the CSAs is delivery driving but they also perform other duties such as preparing and packing crates and loading and unloading from trucks.

The court held that the primary judge erred in determining that the Transport Award did not cover Coles as the road transport and distribution industry includes work that is ancillary to the principal business and Coles’ principal business, whilst clearly a retail business, includes transport.

The court also held that the Retail Award also covers Coles as the general retail industry means the sale of goods and services to final consumers including food retailing, supermarkets and grocery stores.

The real issue of the case was the determination of which of the two modern awards apply to the CSAs and that is determined by considering which award classification is most appropriate to the work performed by the CSAs and their work environment.

The court held that the primary judge was correct in determining that the relevant classification under the Retail Award was a more comprehensive match with the work performed by the CSAs than the relevant classification of the Transport Award. A Retail Employee Level 1 is defined as an employee performing one or more of various functions including the wrapping or packing of goods for despatch, the delivery of goods and work that is incidental to or in connection thereto. A Transport Worker Grade 2 is much narrower and is simply defined as the driver of a rigid vehicle (including a motor vehicle) not exceeding 4.5 tonnes gross vehicle mass.

The court also held that the EAs had no application to the CSAs as the first EA came into existence when CSAs were not employed by Coles and the second EA had no application as the CSAs did not vote on approving it.
This decision has important implications for employers who employ delivery drivers.

Whilst it may be assumed by that delivery driver employees are covered by the Transport Award, they may be covered by a different modern award and that different award may apply to them if it contains a classification that is most appropriate to the work being performed and the environment in which they work.

Given the narrow definitions of the classifications under the Transport Award, it may be the case that other modern awards that apply to an employer may pick up delivery driver employees.

Author: Alistair Salmon
Holding Redlich

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