15 May 2020

NZ Couriers claim drivers' wage subsidy: 'They're rorting everyone'

From Checkpoint, 5:07 pm on 15 May 2020

Courier companies have been deducting the government's wage subsidy from payments made to drivers contracting during lockdown - a move unions say is illegal.

Thousands of drivers have been working around the clock to deliver the skyrocketing volumes of residential freight over the past few weeks.

But despite parcel numbers and hours being higher than ever, their pay has taken a significant hit.

One courier driver - who works for NZ Couriers - told RNZ she was arriving at her depot at 4.15am to start loading up and was not finishing until 6pm most days.

She used to deliver about 300 packages per day, but that had jumped to 600. She said she had been working such long hours she'd had to ask her partner to help so they could run two vehicles to keep up.

Her pay has dropped from an average of $6600 per month to $4800 last month - before tax.

Residential deliveries, which are taking up the vast bulk of their work at the moment, pay between 20c and $1 each.

For the drivers who have helped with thousands of education packs all over the country, it has been especially hard work.

"The stock came down a little bit, for about two weeks we were really, really quiet but then when it jumped up because the volumes doubled and tripled, we're back where we were - and even more so," she said.

Another driver said things were much busier than they were in Christmas, with each of the runs he takes care of tripling in volume.

Most couriers are independent contractors - meaning they should have control over their business, hours and working conditions.

But that was often not the reality of their working situation. During lockdown, NZ Couriers has told drivers to take the government's wage subsidy, which is only available for employees.

Their contract for May states: "For the 12 weeks that the government subsidy applies, $117 per day of contractor remuneration is assumed to have been received, and the company will contribute the balance up to 90 percent of run's listed minimum earnings or tickets redeemed, whichever is greater."

Courier delivering package.

Courier delivering package. Photo: 123rf

Lawyer Garry Pollak said the way Freightways - which owns NZ Couriers and a number of other courier outfits - was approaching the wage subsidy was likely illegal.

"Who benefits from the wage subsidy? It's not the applicant to the wage subsidy who is the contractor, it's the courier company and that's exactly what the wage subsidy scheme is not intended to do."

Mr Pollak last week won a case in the employment court that a courier driver was in fact an employee, despite the company claiming he was an independent contractor

He said the situation with drivers during lockdown was no different - with courier companies wanting to treat their drivers like employees only when it suited them.

"They are taking advantage of the situation to benefit themselves."

Jared Abbott of First Union said it was a similar case for all Freightways contractors.

"It just seems like they're rorting everyone because they're not giving discounts to the customers, they've said themselves that they've got triple the workload that they usually do and then they're taking the money back off the people that are actually entitled to the money.

"It's really a three-way rip off of the customers, their workers and the government."

Courier drivers RNZ spoke to said they had been dismissed or bullied when they tried to raise the issue.

"They've cut a lot of our rates - line hauls and contract rates and fuel subsidies... and when we've challenged the fairness of that, they've said 'well that's what the subsidy is for, it steps in to cover that'."

Freightways said volumes were down between 50 and 60 percent through April, but rose at the start of May they rose to be in line with pre-Covid volume.

It said New Zealand Courier had flagged to contractors that where any minimum monthly earning thresholds were necessary for the May month, they would subsidise up to 90 percent of the threshold, but would "commit to reviewing that towards the end of the month, with a view of bringing it back to 100 percent should trading conditions support it".

In a statement, the Ministry for Business employment and innovation said the Labour Inspectorate was concerned that the situation raised questions about the employment status of the courier drivers and their integration into the business of the courier companies.

"The Inspectorate is pursuing inquiries accordingly."