Cleanaway bills truck drivers in retrospective pay cut

While Cleanaway mainly employs truck drivers as permanent staff, contractors with their own vehicles can operate as “owner-drivers”, in which they can receive a flat rate of about £3.50 per cubic metre of waste. Contractors can dispose of hundreds of cubic metres of waste a day. Mr McHugh’s letter warned contractors that Cleanaway’s administration team was tallying up the “additional monies” contractors would now owe the company, based on previous payments made between 1 July and 18 September.

“Once this calculation has been completed, the administration team will forward you the calculated amount for you to verify. Upon acceptance of, the monies owing by you for the 2020 rise and fall will be deducted from your next payment run.” One industry source said it would likely drive Cleanaway contractors into the arms of competitors.

The news came after Cleanaway, Australia’s biggest waste management company, was hit by multiple allegations of bullying by chief executive Vik Bansal. An investigation by The Australian Financial Review found Mr Bansal was the subject of an independent probe after a whistleblower complaint in May 2020 that alleged a “culture of bullying and harassment” by the boss, while an earlier complaint in March 2019 that went to the board and top HR executive Johanna Birgersson alleged much of the same conduct. There is no suggestion Mr Bansal was involved in the decision to enforce the “rise and fall adjustment” against its drivers.

While the company did not disclose the probe, or link the behaviour to a 25 per cent reduction in Mr Bansal’s short-term incentive in the 2020 annual accounts, the Mark Chellew-chaired Cleanaway board last week admitted the CEO’s pay cut was due in part to his “behaviour”. Mr Bansal had previously forcefully denied such a link. Cleanaway shares have fallen about 17 per cent since the Financial Review’s revelations.

The company is being examined by the Australian Securities and Investments Commission over the disclosure of the June independent probe into Mr Bansal. It is also being investigated by the NSW Environmental Protection Agency and the federal government’s workplace health and safety agency Comcare.

Last week, the Financial Review revealed a 2019 probe by the government’s National Measurement Institute found a high number of Cleanaway’s fleet of front-lift garbage trucks did not have scales that were accurate or calibrated correctly, after which the company stopped charging excess weight fees to customers. However, the company did not tell some of its largest customers they had potentially been wrongly charged.

Cleanaway said its owner-drivers were “a valued part of the company’s operations”, and that it was “standard practice” for the company to adjust its rates using the CPI measurement in each state. “An increase in CPI can result in a backdated payment to owner-drivers and a decline can result in a reduction in payment. Adjustments vary from state to state depending on its CPI,” Cleanaway said.

“In 2020, with normal business volumes disrupted by the pandemic, Cleanaway supported its owner-drivers by ensuring continuity of the volumes to assist their operations. Cleanaway has offered to discuss payments with any owner-drivers who feel they may have difficulty with the arrangements and may need extended terms.” Mr Bansal, who on Thursday was docked £2.3 million in performance rights, has apologised for his behaviour towards staff since the Financial Review’s investigation was revealed.

While he has revived the fortunes of the £4.5 billion company, formerly known as Transpacific Industries, since joining in 2015, triggering a 300 per cent rally in Cleanaway shares over that time, his management style has left many unhappy in the process.

Senior workers who either used to work for Cleanaway or continue to do so have pointed to Mr Bansal’s leadership style as the chief reason for high levels of manager turnover and low employee morale.

Mr Bansal is receiving “mentoring” and is subject to “enhanced reporting and monitoring”. He has shared his own improvement plan with the board.