Weekly News 22.1.16 – Road Safety Remuneration Orders: What do they mean for you?

ROAD SAFETY REMUNERATION ORDERS: WHAT DO THEY MEAN FOR YOU?

The Road Safety Remuneration Tribunal (the Tribunal) has now issued two road safety remuneration orders (RSRO) that are likely to affect your road transport business.  These are:

RSRO Start End
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 contracts – even those that you already have in place.  So, while there is still a few months until the 2016 RSRO comes into effect, you should factor the RSRO requirements into to any contract that you enter into before this time.

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.

It may also be the case that family members of a constitutional corporation are exempt provided that driving is not their principle occupation – but this is not entirely clear and it appears that it would only exempt the ‘contract’ between the company and the related family member.

What Tasks are Covered by the Orders?

The RSROs can apply the distribution of goods or livestock:

  • destined for sale or hire by a supermarket chain; or
  • as part of long distance operations.

Where:

  • ‘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.

General Provisions

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

  1. 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.

Payment Times

  • 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.

Training

  • 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.

Contracts

  • 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.

Minimum Payments

  • 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)
Semi $23.53hr + $1.41km $31.29hr + $1.53km
B-Double $23.57hr + $1.57km $35.33hr + $1.80km
Double RT $23.53hr + $1.71km $41.67hr + $2.00km
Triple RT $23.53hr + $1.97km $52.06hr + $2.42km

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.

Annual Leave

  • 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.

What is the ALRTA Doing About the RSROs?

The ALRTA acknowledges that there are mixed views within the road transport industry about different aspects of the RSROs.  On balance, the ALRTA does not believe that there is a need for the Road Safety Remuneration Tribunal or the RSROs that it has delivered so far.

The ALRTA has made detailed representations to the Tribunal and to Government concerning the scope and operation of the Tribunal and the draft RSROs that have been proposed.

We have been successful in advocating some changes to the draft RSROs.  For example, the 2016 RSRO:

  • Contains minimum rates that are substantially lower than originally proposed;
  • Annually indexes rates by 2% rather than 3.2%.
  • No longer requires payments for rest breaks exceeding 30min; and
  • No longer includes an additional loading in NT, Tasmania and regional WA.

However, many operators are simply unable to comply with certain aspects of the RSROs and we are already seeing the first signs of a structural change in the industry which might push owner-drivers out in favour of employee drivers.

The Australian road transport industry is made up of many different types of vehicles, freight, tasks, operating conditions and prevailing charging structures.  It is simply not possible to set one type of minimum rate for the entire freight contracting industry.

The rural transport sector is particularly complex.  Owner-drivers are prime contractors one day and sub-contractors the next.  A single return trip can involve multiple customers and destinations, mixed loads, part loads, empty running between some loading points, and ‘side work’ that happens to fit in with the primary task being undertaken.

The ALRTA considers that the RSROs do not take this complexity into account and will just lead to increased confusion and disputes.

The ALRTA National Council will meet in Canberra on Friday next week to discuss the implications of the 2016 RSRO and to consider our next steps.

How can You Help?

If the RSROs are causing problems for your business then we want to hear about it.

We have already made strong arguments about what we think will happen, but there is no substitute for hard evidence about what has happened.

To get you thinking:

  • Are you able to put written contracts and safe driving plans in place prior to engaging sub-contractors?
  • Have you discontinued the use of subbies because of the new minimum rates?
  • Did a prime contractor terminate your services because of the new rates?
  • Did you have to run home empty when otherwise viable freight was available?
  • Have you had trouble charging out part loads?

Please call the ALRTA Secretariat and let us know about these or any other problems you are experiencing.

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