Published: 27 February 2017
Author: Ryan Carlisle Thomas
Owner drivers - are you covered by WorkCover?
Many owner drivers are confused as to whether they are covered by WorkCover. If you are an owner driver who is not an independent business as deemed by WorkCover, you will be covered in case of a work injury.
This is how it works.
There are a large number of truck drivers who are not direct employees of the businesses they work for, but rather what are known as ‘owner drivers’. They run their own trucks, pay for their own fuel, insurances, and are responsible for their own earnings subject to the amount of work they do for the business(es) they work for.
If you are one of these people, you will be covered by WorkCover if you are an unincorporated worker driver.
An unincorporated owner driver, under WorkSafe guidelines, is deemed to be a ‘worker’ of their hirer unless WorkSafe determines that the owner driver is carrying on an independent trade or business.
When are you carrying on an independent trade or business?
An unincorporated owner driver is carrying on an independent business when he or she enters into an arrangement with a hirer under any of the following conditions (over a certain period):
- Relief drivers perform at least 20% of the goods transport services;
- Less than 80% of overall services income is or is to be earned from the relevant hirer;
- Goods transport services are less than 180 days for the relevant hirer; or
- Services are performed on less than 3 days per week for the relevant hirer.
If you meet any of these conditions above, you are likely to be considered as running an independent business and WorkSafe will not ‘deem’ you as a worker of your hirer for the purposes of WorkCover legislation.
Remuneration for worker/owner drivers. How weekly benefits are calculated
The deemed remuneration amount must be calculated in accordance with a particular formula and takes into account the type of vehicle you drive.
For instance, there are different deductions to be made in respect of prime movers, motor vehicles in excess of 10 tonnes, motor vehicles from 3 tonnes to less than 10 tonnes, motor vehicles less than 3 tones and motor cycle couriers. This is to take into account the increasing overheads an owner driver faces as the size of the vehicle increases.
If you are an owner driver, you would naturally have overhead expenses associated with the running of your vehicle which you would ordinarily pay from your taxable income. The purpose of these deductions is to account for those expenses. Otherwise, your weekly benefits would far exceed what you would ordinarily take home as you would not be spending as much in running costs if you are off work which would be contrary to the intention of the legislation.
Such a purpose brings these benefits, which available to owner drivers, into line with benefits available to everyday employees of insured employers.
In calculating your pre-injury average weekly earnings for the purposes of your weekly payments of compensation if you have required time off work, the following formula applies:
The amounts of money payable to anyone who is a deemed worker/owner driver for the performance of transport services less a particular percentage deduction under these guidelines is deemed remuneration, which is used in calculating your pre-injury average weekly earnings (PIAWE). Thus, the relevant formula is:
PIAWE = Taxable income – the applicable Standard Deduction (depending on the size of the vehicle)
Given the not insignificant earnings owner drivers have the potential of making, consideration then has to be had to whether the result of the above formula exceeds the statutory maximum payable by WorkCover insurers.
So what does it all mean?
Provided you are a ‘deemed worker’ and don’t fall into any of the categories above, you ought be entitled to compensation in the form of weekly payments calculated in accordance with the formula referred to above.
Such weekly payments are then to be made in accordance with the ordinary provisions of the Act as if you were an employee of that company.
Just because you own your own truck and work as an owner operator does not mean you that you aren’t covered by the WorkCover scheme.
If you are an owner driver and have taken time off work because of work-related injuries, you should seek legal advice as soon as possible to ensure that you get everything you’re entitled to.