Recent changes to road transport modern awards

Recently the Fair Work Commission (FWC) issued a number of determinations that alter the Road Transport (Long Distance Operations) Award 2010 and the Road Transport and Distribution Award 2010.

Minimum wage

On 31 May 2016, the FWC increased the national minimum wage.

For award covered employees, the award classifications increased by 2.4% with weekly wages rounded to the nearest 10 cents.

The national minimum wage increased to $672.70 per week or $17.70 per hour. The increases applied from 1 July 2016.

Failure to implement the minimum wage increases (and back date if necessary) may result in underpayments to employees, which can result in prosecutions and the imposition of civil penalties by the Fair Work Ombudsman.

Annual leave

As part of the four yearly review of modern awards, the FWC has decided to vary the annual leave provisions in the majority of modern awards in respect of the following matters:

• cashing out annual leave;
• excessive annual leave accruals;
• granting annual leave in advance; and
• payment of annual leave during leave.

The FWC issued determinations on 29 July 2016 varying the Road Transport Distribution Award and Road Transport Long Distance Award. Both determinations allow for:

• cashing out annual leave;
• excessive annual leave accruals; and
• granting annual leave in advance

The Road Transport Long Distance Award was also varied to allow for the payment of annual leave by electronic funds transfer during leave periods in accordance with the normal pay cycle.

Cashing out annual leave

All Award covered employees can now cash out some of their annual leave, with certain conditions. The conditions include:

• a maximum of two weeks of annual leave can be cashed out every 12 months;
• the requirement that the employer and employee must enter into a separate written agreement containing specific provisions about the cashing out of the leave; and
• the requirement that employees have an entitlement to at least four weeks of paid annual leave remaining after the leave is cashed out.

Excessive annual leave accruals

An employee has an excessive annual leave accrual if they have more than eight weeks of accrued annual leave (or 10 weeks for a shift worker). Subject to certain conditions, if an employee has an excessive annual leave accrual, the employer now has the right to direct that employee to take annual leave and the employee has the right to require the employer to grant a period of annual leave.

Granting annual leave in advance

An employer and employee can now agree, in writing, for the employee to take paid annual leave in advance of the leave accruing. If the employee has not accrued the entitlement to annual leave when their employment ends, the employer is then entitled to make equivalent deductions from the employee’s termination payments. Some modern awards already include a similar provision.

Payment of annual leave during leave

Previously under the Road Transport Long Distance Award, employers were required to pay an employee annual leave in advance of the employee taking the leave. The Road Transport Long Distance Award was varied to allow the employer to pay the employee while they are on annual leave in accordance with the usual pay cycle, if they are paid by electronic funds transfer.

Expense-related allowances

As of 1 July 2016, expense allowances were increased. The meal allowance for the Road Transport Distribution Award (clause 16.4 (e)) was increased from $14.93 to $15.26.

Under the Road Transport Long Distance Award the housing allowance (clause 14.2 (d)(ii)) was amended to state that where an employer provides housing for an employee and the employee’s family, requires the employee to live there and charges them rental, the employer must pay the employee an allowance of $3.30 less than the amount of rental charged by the employer for the accommodation.

Proposed changes

Casual and part-time engagement

As part of the Modern Award review process there are further changes proposed for the Road Transport Distribution Award and the Road Transport Long Distance Award. A hearing at the FWC was conducted on 5 August 2016 to consider changes to casual and part-time employment. Broadly, the hearing considered casual and part-time provisions across a range of Modern Awards, including:

• a variation to the minimum engagement of part-time employees;
• a variation of part-time rostering provisions and patterns of hours;
• a variation of part-time overtime provisions;
• a variation to the casual minimum engagement;
• a casual conversion (including the requirement to notify eligible casual employees of their right to elect to convert); and
• restrictions on casual engagement.

If accepted, a provision to allow engagement of employees on a part-time basis will be introduced into the Road Transport Long Distance Award. At present, employees under the Road Transport Long Distance Award can only be engaged on a full-time or casual basis.

Payment of wages

The Fair Work Commission is also considering proposed changes to the payment of wages across a broad range of Modern Awards. Specific to the Road Transport Distribution Award and the Road Transport Long Distance Award, the FWC is considering a proposal that employers who pay by EFT will be allowed to make termination payments in accordance with the normal pay cycle.

Further proposals

Further proposed changes submitted for the Road Transport Long Distance Award to be considered by the FWC include:

• a variation of the definition of ‘long distance’;
• a requirement that an employee is provided with a copy of the fatigue management plan;
• a limitation on an employee’s ability to perform work under the Road Transport Long Distance Award and Road Transport Distribution Award on the same day;
• payment for time spent by an employee as a passenger;
• payment for time as a passenger during two up operations;
• expansion of the definition of ‘loading and unloading’; and
• casual employee entitlement to work diaries.

Further proposed changes for the Road Transport Distribution Award to be considered by the FWC include:

• extended ‘ordinary hours’;
• limitations to when meal allowances are payable;
• limitations to the application of higher duties provisions;
• amendments to classification definitions;
• the definition of ‘road transport industry’;
• the definition of ‘driver’; and
• limitations to the entitlement to meal breaks.

We will keep you informed of all changes to the Road Transport Distribution and Road Transport Long Distance Awards when the FWC review is finalised.