A transport company in Queensland has been found guilty of knowingly employing a pay structure that allowed and encouraged breaches of the National Heavy Vehicle Law fatigue management requirements. The 200 breaches, occurring in a five-week period in 2020, resulted in 37 offences and a total penalty of $21 million, which came to light due to a minor unloading incident that was not fatigue related. The case is a shocking reminder to all in the chain of responsibility that it is imperative that systems be in place to identify and discourage breaches and breach behaviour and that the payment of a ‘high’ wage does not remove the need for fatigue compliance.
The employer had the penalty reduced by the Queensland Magistrate court to $1.2 million following its early and cooperating guilty plea and in recognition of both the subsequent steps taken by the businesses to establish compliance and the employer’s meagre assets (totalling a value of $4,500) when it was shown that the employer did not own the vehicles.
The company employed drivers to transport large rocks from a quarry to a holding area. A “generous hourly rate” was paid to the drivers, which the National Heavy Vehicle Regulator (NHVR) contended “encouraged” them to disregard their personal fatigue management obligations. The contention was that the company was “fully aware” of the unsafe conduct of the eight drivers, but that they were also able and required to correct it, but they chose not to.
The company entered an early guilty plea and cooperated with the regulator.
In handing down the penalty Magistrate Young noted that the high rate of pay paid to the drivers should have been viewed as a clear risk to compliance and outlined that it was incumbent on the employer to recognise this risk and put into place systems to ensure that the risk is managed. He found the company paid the drivers a “generous hourly rate” that tempted them to ignore the HVNL’s fatigue-related requirements around rest breaks and other issues. “It is relevant to the culpability of the [company] that in paying the drivers in such a way the [company] needed to be proactive in avoiding circumstances of the drivers not complying with the fatigue regulations to increase their take home pay,” and “As the opportunity and temptation to the drivers was obvious, the company needed to be diligent in overseeing the obvious risk.”
Instead of this proactive acknowledgment and management of the risk the finding was that the company was “fully aware” of the eight truck drivers’ unsafe offending conduct and could have stepped in and ended it, but didn’t. In examining the five weeks in question it was found that the company acknowledged and occasionally modified the timesheets in such a way that confirmed it understood there were breaches but did not address them or the system that encouraged them.
“Even a cursory review of the hours worked by the drivers on a weekly basis shows significant concerns but instead of stepping in to end the drivers offending conduct, the [company] paid them substantially – although not entirely – in accordance with their [hourly] claims, and in doing so [has] been held to have encouraged the drivers to continue to disregard their fatigue obligations,” noted Magistrate Young.
In handing down the much-reduced penalty, Magistrate Young noted that “Each relevant week the defendant had the information and indeed the obligation to step in and address the conduct of its drivers – but did not. [The company] created the environment for the breaches to occur… [It] had the capacity as well as the obligation to step in to stop the egregious actions of its drivers when that became obvious. Such action was not overly difficult or complex – at worst, it was perhaps uncomfortable; the risk to innocent road users and the public generally was unacceptably high – even if not realised – and having regard to the maximum penalty of $21 million (there is no minimum) it justifies the Court imposing a financial penalty that appears beyond the present means of the company”.
Learnings for all businesses
This case, while transport specific, highlights important learnings for all businesses and employers.
“While it might seem odd on the surface to view the payment of a high hourly rate as a risk to the safety of the community and workers, or indeed the reputation of the business, particularly in the context of multiple headlines around underpayments, it is important to remember that the safety and compliance duties are positive duties and this changes the way that risk needs to be viewed”, explains ACAPMA’s Elisha Radwanowski.
In this case the breaches and penalties all came about because the business failed in meeting a positive duty, which is to say no one was hurt and there was no fatigue incident that the regulator and courts were responding to, it was simply an uncomplicated unloading incident that could just as easily have been a random roadside stop, that highlighted multiple fatigue breaches in the logbook, which caused the regulator to go looking further.
“A positive duty is one that exists before any work has been done or any incident has occurred, it is always there and the onus is on the employer to positively and proactively ensure compliance and safety, this means actively assessing the risk of actions, systems and structures and responding to mitigate that risk. In this case the high hourly rate paid to the drivers, while fine from an employment perspective, needed to be viewed through the safety and compliance lens asking the question “does this make achieving safe operations more or less likely”. In this case it is the Magistrates finding that it was reasonable to assume at least some drivers would strive to drive more hours to increase their take home pay, which means the business should have foreseen this risk and put into place systems to prevent any excessive hours breaches”, continued Elisha.
“It is not enough for the business to rely on the fact that drivers, and indeed all staff, have a personal responsibility to conduct themselves safely and compliantly. Indeed, in this case the drivers themselves were breaching the NHVR laws and the safety laws and could have faced their own cases, but the personal responsibility does not let the business off the hook for their positive duty, in safety it is everyone’s problem and everyone’s responsibility.
“The message is clear, every business needs to take the time to review all of its operations, not just its overt safety systems, to ensure that they are not in themselves a safety risk, as well as to ensure that their operations or abuse could not give rise to safety risks. Where a business finds the potential for safety implications it must respond by putting into place mitigation strategies, such as hours compliance reviews, oversight, training and auditing”, concludes Elisha.
Here to help
Safety Highlights are things to consider, implement and watch out for in your business. They are provided as general information for you to consider and do not constitute advice. You should seek further advice on your situation by contacting your legal advisor. ACAPMA members can access resources and receive advice, guidance and support from the ACAPMA employment professionals via employment@acapma.com.au, it is free for members. ACAPMA Membership delivers this and more benefits, see acapma.com.au/membership for more information.
Elisha Radwanowski BCom (HRM & IR)
Executive Manager for Employment and Compliance
ACAPMA
Source: https://acapmag.com.au/2023/07/21-million-in-fatigue-breaches-encouraged-by-high-pay-structure/.
