No Delay to Road Safety Remuneration Order
Late this afternoon, the Road Safety Remuneration Tribunal (RSRT) has issued a decision not to delay the commencement date of the 2016 Road Safety Remuneration Order (2016 Order).
This means that the whole 2016 Order will commence on 4 April 2016 – including the minimum rates.
Operators should be aware that the existing 2014 Order contains ‘adverse conduct’ provisions that can apply penalties to hirers that discontinue to use of owner drivers because of any entitlement arising from an Order. This means that if you discontinue the use of an owner driver AFTER 4 April 2016 because the new rates are too high the ‘adverse conduct’ provisions may apply to you.
So, if you intend to take action, you should do it before, Monday, 4 April 2016.
ALRTA National President Kevin Keenan said that this is an outrageous decision that totally disregards the owner driver submissions made to the Tribunal and the evidence provided by the witnesses over the Easter period.
“The Tribunal has decided that owner drivers have no place in the road transport industry and should be regulated out of existence. This comes in the face of wide spread confusion about the Order and compelling examples of how the Order will ruin businesses”, said President Keenan.
“The Tribunal has hauled witnesses in over the Easter period under the threat of imprisonment and then totally disregarded their statements and the 800 submissions in support of a delay”.
“How on earth the Tribunal could have found that ‘there is now significant support for the 2016 RSRO’ defies belief”.
“This Tribunal is meant to improve fairness and safety. The anti-competitive nature of the order is not fair. By their own reasoning, the Tribunal should know that placing additional financial pressure on owner drivers is not safe”.
“Affected owner drivers and hirers have every right to be furious at this decision and rally to make their views known to the Federal Parliament. The ALRTA and our state associations will continue this fight to the bitter end,” said President Keenan.
Government Releases Damning Reviews of the RSRT
Today the Federal Government has released two reports which reviewed the operation and impact of the RSRT. One was an independent review undertaken in 2014 and the other was a statutory review required under legislation after the first three years of operation of the Tribunal.
Both reports are damning. In summary, they find that:
- $13.4m has been spent on the Tribunal;
- The link between remuneration and safety is not proven and actions to address any possible link are premature and ill-founded;
- The Tribunal has not adequately considered regulatory overlap with existing safety laws;
- The 2014 and 2016 Orders will together result in a net cost to the economy of around $2.3b in net present value over the next 15 years.
We would also add that a judicial system is highly inappropriate for heavy vehicle safety reform and that the 2016 Oder is inherently unfair and anti-competitive.
The reports conclude that abolition of the RSRT would result in a significant net benefit to the economy and community at large.
The reports are here: https://www.employment.gov.au/news/two-reviews-road-safety-remuneration-system-released-and-consultations-commence
Federal Government to Consult on Reform Options
In the wake of the damning reports and widespread industry opposition to the RSRT, the Federal Government will now consult on options for reforming the system.
The Government has released a discussion paper which you can find here: https://docs.employment.gov.au/system/files/doc/other/discussion_paper_rsrs_march_16.pdf
Four options are proposed:
- Option 1: No change
- Option 2: Ensuring the Tribunal considers safety evidence and evidence of economic impacts
- Option 3: Narrow the scope of the Tribunal
- Option 4: Repeal (abolish) the Road Safety Remuneration System
Abolition of the Road Safety Remuneration System is the only option as far as the ALRTA is concerned. We need the immediate expiry of all current Order. We will participate in all consultations and make a formal submission.
We understand that the government will convene a series of forums, which will include regional locations. We will circulate information about how to attend when it comes to hand.
The ATA Swings into Action
The ATA Council met on 30 March 2016 to consider several draft resolutions on the RSRT moved by ALRTA and seconded by SARTA.
The motions were drafted some weeks ago before the RSRT hearings to consider a delay in the Order were called and subsequently held.
Disappointingly, the ATA Council did not agree to write to the RSRT seeking a delay of the Order, but this was primarily because the window for formal submissions had closed. ATA Council did however agreed to write to the Fair Work Ombudsman seeking greater clarity about application of the Order.
In a bold move, the ATA Board met at 11am today to consider the review reports. The Board agreed that the ALRTA will respond to the reports by staunchly opposing the 2016 because of the dire economic impacts and immediate threat to the viability of many in the industry.
The ATA will issue a media release today and begin lobbying on the issue.
The ATA Council will next meet face-to-face on 20 April 2016. Members have been asked to make written comment to the ATA containing any proposed motions about the 2016 Order or future of the Tribunal.
Overview of the RSRT Hearings
Recap: The draft variation to the 2016 Order
After the hearing on 15 March 2016, the RSRT issued a draft variation to the 2016 Order which would delay the commencement date from 4 April 2016 to 1 January 2017 and phase in the minimum rates for existing contracts over 3 years.
The ALRTA once again made a joint formal submission in coalition with the National Farmers Federation and Council of Small Business Organisations of Australia.
Depending on how you count them, the industry rallied and made around 800 submissions. The vast majority supported a delay until 1 January 2017 and many also supported the phasing measures.
The ‘Mention’ Hearing: 24 March 2016
The main purpose of this hearing was to confirm the attendance of witnesses. The RSRT had ordered around 30 witnesses to appear during the Easter period under threat of 6mths imprisonment. Some applied to be excused, but the RSRT rang each of them and generally compelled them to appear by phone instead. The TWU called some additional witnesses.
The big surprise was that TWU, TOLL and Linfox had been negotiating during the week and announced at the hearing that they had agreed on a compromise. It was asserted that others had also agreed but AIGroup stated they had only agreed to part of the compromise and NatRoad and ARTIO rejected the claim altogether. Parties argued about the status of the compromise but it was nonetheless accepted by the Tribunal as document ‘TWU1’. ALRTA had not previously seen the document or been party to the discussions.
Among other things, TWU1 proposed the following:
- Start date of 1 October 2016 for payment provisions. Most other provisions would still commence on 4 April.
- Phasing of rates over one year only: 1 Oct 2016 (80%), 1 Apr 2017 (90%), 1 Oct 2017 (100%).
- Commitments in principle: 30 day payment terms (not agreed by AIG); extend min rates to all (not agreed by AIG); variations to deal with split loads etc and specific exclusions.
- Some tweaks around alternative payment systems.
- Parties maintain right to seek further variations.
More about this later.
The Easter Hearings: 26-28 March 2016
The ALRTA National President, ALRTA Executive Director and LBCA Executive Director participated in a gruelling three days of hearings over the Easter Period (Sat-Sun-Mon). All of the witnesses were cross examined.
As the hearings wore on, it seemed more and more like the lawyers for TWU, TOLL, Linfox and (at least in part) AI Group were working together to push for an outcome similar to that proposed in TWU1. There were a lot of objections and counter objections on Day 1 as the parties tested the limits of allowable questioning.
The TWU routinely pursued an intimidation tactic of forcing witnesses to reveal the identity of any hirer that might be contemplating discontinuing the use of sub-contractors. This was usually done in a closed session, but the message was clear. Some witnesses just withdrew their statements rather than face this kind of exposure. This of course reduced the value of the hearings.
While the ‘big end of town’ and the union lawyers did their best to have witnesses say they did not understand the 2016 Order or that they were not aware of some of the provisions, I think this only served to show how vital it is to improve clarity and awareness of the Order before it commences.
There were many witnesses who were able to clearly show that the Order will have a negative financial impact on their business, particularly for back loads, part loads and loads with multiple hirers. Some of these witnesses were quite reasonably against the Order in its entirety. The ‘big end of town’ lawyers tried to paint opposition as ‘not caring when the order starts’, but in these circumstances the ALRTA asked careful questions so that the witness had an opportunity to state the need for a delay until 1 January 2017.
On Day 3 the lawyers took the stick to NatRoad for doing what any association would do – assisting their members to understand the Order and exercise their entitlement to object to it. We pointed out in our line of questioning that members expect their associations to fight for them and that the campaigning of owner drivers was no different to the campaigning of the unions to establish minimum rates in the first place.
Overall it was your typical David vs Goliath court room scenario.
The ALRTA sincerely thanks all witnesses who appeared at one of the hearings to put their business on the line for the wider industry.
Yet Another Submission
Throughout the proceedings there was zero understanding about the status of the TWU / Linfox / TOLL agreement, ‘TWU1’. It came up from time to time, but an argument always immediately followed.
At the close of the Easter hearing, the RSRT Bench directed that parties could make submissions on TWU1 by 4pm the following day.
We again made a joint submission with NFF and COSBOA. We argued that the document should be disregarded because it was not tendered during the formal submission period and does not have the support of the main affected party – owner drivers. It would also impose confusing and possibly unnecessary red tape from 4 April 2016 even though the rates would not apply until 1 October 2016.
Looking through the submissions posted online, most have rejected the compromise position.
ROAD SAFETY REMUNERATION ORDERS: WHAT DO THEY MEAN FOR YOU?
The RSRT has now issued two road safety remuneration orders (RSRO) that are likely to affect your road transport business. These are:
|Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014
||1 May 2014
||30 April 2018
|Contractor Driver Minimum Payments Road Safety Remuneration Order 2016
||4 April 2016
||3 April 2020
It is important for all transport businesses to be aware of the RSROs which are the law during the periods specified above. Non-compliance can be subject to significant penalties.
The RSROs override all contacts – even those that you already have in place. You should factor the RSRO requirements into any contract that you enter into.
The ALRTA has prepared this advice to raise awareness of the RSROs and to help you understand their scope and coverage. The advice necessarily summarises some of the content and so we recommend that you read the RSROs in full and seek professional advice if in any doubt.
Who is Covered by the Orders?
The RSROs are established under Commonwealth Law using constitutional powers over corporations; territories; and interstate trade. This means that the RSROs have broad, but not 100% coverage. Generally, the RSROs will apply to you if:
- You or another party to a transport contract are a constitutional corporation, based in a Territory; are part of a body corporate in a Territory; or are a Commonwealth / Territory authority;
- The primary purpose of the transport is to further the interests of any of the above;
- The contract is entered into in a Territory or the transport service occurs in a Territory;
- The transport service crosses a State or Territory border and exceeds 200km in total distance.
To ensure compliance, you will need to know the legal status of the other parties in the chain – so sometimes it might be wise to err on the side of caution and assume the RSRO applies if you just don’t know.
However, one situation in which you can be fairly certain that and the RSRO does not apply is if you are a sole trader / partnership, doing work for another sole trader / partnership, and the work occurs wholly within one State.
The latest advice from the Fair Work Ombudsman indicates that if you are an owner driver, but you operate other trucks that are driven by employee drivers, none of your vehicles will be subject to minimum rates.
You can find the advice on this and other issues here: https://www.fairwork.gov.au/about-us/legislation/road-safety-remuneration-system
What Tasks are Covered by the Orders?
The RSROs can apply to the distribution of goods or livestock:
- destined for sale or hire by a supermarket chain; or
- as part of long distance operations.
- ‘Livestock’ refers to horses, cattle, sheep, pigs, goats and poultry.
- ‘Super market chains’ refer only to those with five or more outlets.
- ‘Long distance’ operations are defined as interstate operations or return journeys where the distance travelled exceeds 500km.
The RSROs provide road transport drivers with protection against ‘adverse conduct’. This means that you cannot discriminate against a road transport driver simply because they have a workplace entitlement which they may exercise under an RSRO. This includes refusal to make use of services offered by the road transport driver.
The Road Safety Remuneration Tribunal is empowered to hear certain types of disputes about remuneration or related conditions.
Enforcement of the RSROs is the responsibility of the Fair Work Ombudsman.
Specific Provisions of the RSROs
- 2014 RSRO: Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014
The full 2014 RSRO can be found here: http://www.rsrt.gov.au/index.cfm/remuneration-orders/enforceable-rsros/pr350280/
This order applies to both ‘hirer – contract driver’ relationships and ‘employer – employee’ relationships.
Mandatory Written Contracts
- A written contract must be in place between the parties prior to engagement.
- The RSRO specifies the minimum content of the contract.
- The employer or hirer must keep a copy of the contract for 7 years from the date of cessation of the contract.
- A hirer must pay to a contractor driver any undisputed amount set out in a valid taxation invoice provided by the contractor driver, or generated for the contractor driver, for the provision of a road transport service on any given day, within 30 days of the date of receipt by the hirer of the invoice.
- There are also rules around deductions for equipment and insurance etc.
Safe Driving Plans
- Employers or hirers must provide written safe driving plans to road transport drivers engaged in long distance operations.
- The plan must be developed and reviewed in consultation with the driver.
- There are strict rules concerning the minimum content of the plan.
- Records must be kept by the employer or hirer for 7 years.
- The employer or hirer must take reasonable steps to provide WH&S training and reimburse the driver for any reasonable training undertaken with prior consent.
Drug and Alcohol Policy
- The employer or hirer must prepare and implement a drug and alcohol policy, ideally in consultation with drivers.
- Minimum content of the policy is specified by the RSRO.
- Drivers must be trained in the policy and any costs reimbursed to the driver.
2) 2016 RSRO: Contractor Driver Minimum Payments Road Safety Remuneration Order 2016
The full 2016 RSRO can be found here: http://www.rsrt.gov.au/index.cfm/remuneration-orders/enforceable-rsros/pr350441/
This order applies only to ‘hirer – contract driver’ relationships does not apply to ‘employer – employee’ relationships that are otherwise covered by awards or enterprise agreements.
Promotion of Orders
- Both the 2014 and 2016 RSROs must be proactively promoted by the hirer.
- This can include being on display at the depot, being on the hirer’s website, and supplying information on where to find the order on the RSRT website.
- All parties must take reasonable steps to ensure that contracts (including pre-existing contracts) do not contain provisions that would otherwise prevent compliance with the requirements imposed by the RSRO.
Audit of Contracts
- The hirer must permit other supply chain parties to audit the hirer’s compliance with the RSRO, including reasonable access to relevant records.
- This applies only if, in that financial year, there is a contract (or multiple contacts taken collectively) that provide for the carriage of goods or livestock on 270 days or more.
- Any non-compliance must first be detailed to the hirer with a request to rectify the problem within 28 days.
- If the person is not satisfied with the response, the matter may then be referred to the Fair Work Ombudsman.
- The RSRO separately specifies minimum payment rates for supermarket work, and for long distance operations.
- In both cases the relevant rate is made up of an hourly rate AND a kilometre rate which apply together.
- The rates are specified in schedules to the RSRO and an online calculator is available at: www.RSRT.gov.au
- In the case of supermarket work, the equivalent long distance rates may instead be used if the contractor travels more than 400km per day.
- Alternative payment methods (e.g. using weight; head; pallet; trip rate) may be used provided that, over a 28 day consecutive period, the total payment is no less than what would have been received by the methods specified in the RSRO. Note: For supermarket work, alternative methods may only be used until midnight 3 October 2016.
- All rates will automatically increase by 2% per year from 4 April 2017.
A summary of select long-distance rates is included below for information.
||Driver + Truck
||Driver + Truck + Trailer(s)
||$23.53hr + $1.41km
||$31.29hr + $1.53km
||$23.57hr + $1.57km
||$35.33hr + $1.80km
||$23.53hr + $1.71km
||$41.67hr + $2.00km
||$23.53hr + $1.97km
||$52.06hr + $2.42km
You can find an online rates calculator here: http://paymentscalculator.rsrt.gov.au/
Work Time and Distance
- The RSRO specifies that payments must be made for each hour, or part thereof, that the contract driver necessarily spends in providing the transport service.
- This includes tasks such as:
- All time spent at the disposal / discretion of the hirer;
- All rest time of 30 or less continuous minutes (unless another driver is driving the vehicle while the contractor is at rest);
- Assisting or supervising others;
- Loading / unloading, cleaning, inspecting, servicing, repairing;
- Refuelling where the service requires more than one full tank of fuel;
- Recording information / documentation;
- Waiting because of a natural disaster (up to 8 hrs a day).
- Hirers are not required to pay for time during which the contractor’s vehicle had broken down or is involved in an accident.
- Kilometre rates apply:
- From the work site or depot from where the contractor is engaged or a location specified by the hirer which is reasonable taking into account the service to be provided; and
- To the location at which the road transport service provided by the contract driver concludes.
- It is important to note that the RSRO does not appear to consider how payments should apply to mixed / part loads, or ‘round trip’ loads which might involve legs in which the vehicle may travel empty.
- On the face of it, ‘backloads’ at rates below the specified minimums will no longer be permissible – meaning that either a full rate load is carried on the return trip or the truck must return empty.
- If a contractor driver has been regularly engaged for 12 months, the hirer must not unreasonably refuse to permit the contractor driver to take 4 weeks unpaid leave on requested dates.