Federal Magistrate Court has ruled in favour of owner-drivers, sending a warning to businesses that treat independent contractors unfairly.
The legal battle began when three owner-drivers, Keldote, L&D Lowe Transportation and Tambo Walters, challenged Riteway Transport’s attempt to replace their single trailers with new B-doubles without fair compensation in 2007.
“The company offered each of the three drivers compensation that was less per round trip than the additional costs associated with running the new trailers and less than the amount requested by the drivers to cover their costs,” Small Businesss Minister Craig Emerson said in a statement.
Federal Magistrate Robert Cameron ruled against Riteway Transport, finding the company’s contracts were unfair.
He found the contracts were “unilaterally imposed” by Riteway and the company attempted to make “a significant change to the equipment required to service the contract without making financial compensation to the applicants”.
Federal Magistrate Cameron has amended the contract with the truckers to limit Riteway’s power to require the owner-drivers to provide new vehicles.
Mr Emerson said: “The Independent Contractors Act allows an application to be made to the court to review a services contract on the grounds that it is unfair or harsh.
“This is an historic judgment – the first substantive action brought for an unfair contract under the Independent Contractors Act.”
Damage costs are still under consideration.