Road Safety Remuneration Tribunal
Parliament Abolishes the RSRT and Keeps Truckies on the Road
NatRoad welcomes the passing of a Bill last night 18 April 2016 in the Federal Parliament to abolish the Road Safety Remuneration Tribunal (RSRT), which will keep up to 40,000 small, family owned truck businesses on the road.
RSRT Contractor Driver Minimum Payments Order 2016
- NatRoad RSRT Order Fact Sheet (doc - 545 KB)
- NatRoad Safe Driving Plan (doc - 298 KB)
- Road Safety Remuneration Order (pdf - 85 KB)
- NatRoad Road Safety Remuneration Submission (pdf - 411 KB)
The Industry Urgently Needs Your Attention to Help Delay the Order
On Tuesday 15 March there was a hearing before the Road Safety Remuneration Tribunal (RSRT) and the RSRT has sought urgent submissions/statements about whether the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 should be delayed so that instead of commencing on 4 April 2016, it commences on 1 January 2017.
NatRoad would appreciate if you could provide a statement to the RSRT addressing the matters set out in this template.
Your statement has to be signed, dated, scanned and sent urgently by email to firstname.lastname@example.org before 10am on Monday 21 March 2016.
This is your last opportunity to convince the RSRT to delay the commencement of the Order. The industry urgently needs your attention.
If you have any questions, please call the NatRoad office on 02 6295 3000.
Template Letter to Your Local Member of Parliament
NatRoad has developed a template letter for operators to send to their local Member of Parliament to assist with getting the implementation date of the Contractor Driver Minimum Payments Order 2016 delayed.
Please CLICK HERE to download a copy of the letter.
Will the RSRT Contractor Driver Minimum Payments Order affect your business?
The Order is Law, and compliance with it is mandatory. If you own a truck or engage a transport business to do work for you it is likely that you will be impacted to some extent by this Order.
To determine the impact of the Order on your business, NatRoad has developed a step by step information sheet. Operators are reminded if affected by the Order, you must be compliant by 4 April 2016. COMPLYING-WITH-THE-ORDER_NATROAD-INFO-SHEET.pdf (pdf - 326 KB)
We have also developed a ‘Contractor Declaration’ form for use by hirers to determine and record, whether a contractor is a ‘contractor driver’ within the definition of the Order. NATROAD_CONTRACTOR-DECLARATION.pdf (pdf - 184 KB)
Will the implementation of the Contractor Driver Minimum Payments Order mean the demise of the owner driver sector of the transport industry?
In a surprise interpretation of an ‘owner driver’ released on Wednesday 17 February, the Fair Work Ombudsman has advised that owner drivers who also employ another driver unrelated to themselves or their business will come under the Road Safety Remuneration Tribunal’s (RSRT) Contractor Driver Minimum Payments Order. Previous information provided on the definition of an ‘owner driver’ published by the Fair Work Ombudsman as checklists for both owner drivers and hirers of owner drivers has been rescinded. The information now being provided in revised checklists states:
Work performed by the owner driver whilst driving his owned truck will come under the Contractor Driver Minimum Payment Order while work performed by his employee driving another truck also owned by the owner driver will not come under the Order (relevant sections of the previous and revised checklists are attached).
This makes no sense at all, and NatRoad is pursuing further clarity on this interpretation by the Ombudsman.
This determination by the Office of the Ombudsman appears to have put in motion events that will start to force substantial numbers of the estimated 35,000 small business operators out of the industry within weeks.
Calls to the Ombudsman by operators attempting to clarify this, and other aspects of the RSRT’s Contractor Driver Minimum Payments Order remain mostly unanswered. The confusion of the industry brought about by the failure of either the Road Safety Remuneration Tribunal or the Ombudsman to provide clarity just weeks before the Order comes into force is deeply concerning with rumours and misinformation widespread.
Hundreds of attendees at recent NatRoad information sessions were mostly unaware of the RSRT or the effects of the Contractor Driver Minimum Payments Order will have on their businesses. When made aware of the Order most operators were extremely concerned about their future. Many owner drivers who attended sessions have already been told by hirers that they will not be given work (or only limited work) after 4 April 2016. Attendees also advised that they were aware that other members of the owner driver community have also received similar advice from hirers or expect to be given notice within the next few weeks.
It is estimated that Australia’s road transport industry is made up of about 50,000 separate businesses, ranging from large multi nationals to individual owner drivers and family owned fleets. Of the 50,000 businesses almost 70% fall into the small ‘owner driver/small family business category’. This means some 35,000 family businesses are currently trying to determine whether or not they are subject to the RSRT Minimum Rates Order. The remaining 15,000 businesses, most of whom also hire the smaller operators, are trying to determine which of their contractors are subject to the RSRT Order.
Sadly there is still no accurate, definitive information on this essential definition forthcoming from either the RSRT or the Fair Work Australia Ombudsman. Also lacking is clarity on how the new minimum rates are actually to be calculated, with the RSRT ‘rates calculator’ page offline for maintenance.
Those who hire contractors are taking the view that hiring anyone who might possibly be deemed to be a ‘contractor driver’ is a high risk step into uncharted waters and are therefore saying a definitive ‘no’ to hiring such contractors.
There is no doubt that 35,000 family transport businesses are currently very uncertain about their immediate future, with many of them facing no work or income after 4 April 2016. These operators are already struggling due to the general downturn in domestic trade, and any disruption to their cash flow will have immediate effect.
NatRoad is currently intensively lobbying Federal and State Politicians seeking at the very least an immediate deferment for 6 months of the RSRT Order, during which time a proper review of its working and consequences can be undertaken. NatRoad has no dispute with the need for sustainable safe rates for all operators, but this Order will fail to achieve that objective.
NatRoad encourages members to immediately contact their hirer to determine whether or not they will be given work after 4 April 2016 and on what basis, and to urgently contact their Federal Member of Parliament and advise them of the effects of the Order on their business.
Members are encouraged to share this advice to owner drivers who may not be aware of the impact on their business.
Road Safety Remuneration Tribunal Contractor Driver Minimum Payments Order, what does it mean for your business?
The following update on the RSRT Contractor Driver Minimum Payments Order has been provided by Gillian Bristow from Cooper Grace Ward Lawyers. NatRoad members are encouraged to call the NatRoad Office for more information or alternatively, call Gillian directly on 07 3231 2925 or visit www.cgw.com.au
The Road Safety Remuneration Tribunal has now issued its final Contractor Driver Minimum Payments Road Safety Remuneration Order 2016. The Order imposes significant obligations on businesses that engage ‘contractor drivers’ directly or contract with a third party that engages ‘contractor drivers’. The Order which mandates minimum rates of payment on an hourly and kilometre bases, fundamentally changes the legal landscape
Who is caught by the Order?
The Order only applies to services provided by a contractor driver employed or engaged in:
- Distribution operations involving the transport of retail goods destined for sale or hire by a supermarket chain (a business operating five or more supermarkets); and
- long distance operations within the meaning of the Road Transport (Long Distance Operations) Award 2010, which broadly covers interstate journeys exceeding 200 km or return journeys exceeding 500 km.
A ‘contractor driver’ is defined as a ‘road transport driver who is an independent contractor’. ‘Road transport drivers’ include both individuals and corporations where each of the corporation’s where each of the corporation’s vehicles is mainly driven by an individual who is a director or majority shareholder of the corporation, or an immediate family member of such a person. ‘Contractor drivers’ are commonly termed ‘Owner Drivers’
What obligations are imposed by the Order?
The Order imposes various obligations on the hirer of any contractor driver and on others in the supply chain such as consignors, consignees, intermediaries and operators of premises used for loading and unloading.
Minimum rates for contractor drivers
Contractor drivers covered by the Order must be paid both minimum hourly rates, including pro-rata payments for any part of an hour spent providing services, and running costs per kilometre for any vehicle they supply.
The minimum rates are set out in a series of schedules to the Order and are based on several factors including:
- the driver’s transport worker grade;
- whether a trailer is used, and if so, whether the hirer or the driver supplies the trailer;
- the type of trailer supplied;
- the class of the vehicle used to provide the services; and
- the nature of the transport services (distribution operations or long distance operations).
The minimum rates prescribed in the Order will automatically increase by 2% per year commencing on 4 April 2017.
The prescribed hourly rate must be paid ‘for each hour or part thereof that a contractor driver necessarily spends in providing road transport services’ and includes time spent:
- while the contractor driver is required by the hirer to be at its disposal or direction;
- during each period of rest of 30 continuous minutes or less as required by law (unless another road transport driver is driving the vehicle during this time);
- loading or unloading including tarping, removing gates or operating on-board cranes;
- cleaning, inspecting, servicing or repairing a vehicle or trailer supplied by the hirer;
- inspecting or attending to a load on a vehicle or trailer;
- refueling the vehicle (provided the road transport service requires more fuel than the fuel tank of the vehicle can hold);
- recording information or completing documents required by the hirer;
- queuing or waiting or in control of the vehicle; and
- waiting in a location because of a natural disaster such as a flood or bushfire or other emergency (provided that a maximum of eight hours in any period of 24 hours will be counted and provided that the contractor driver took all reasonable steps to minimise the waiting time).
The paid hours of work for a contractor driver will run from when they leave the depot from which they are principally engaged or the location specified by the hirer until they arrive at the ultimate location where the goods are to be delivered.
Distinction between distribution operations and long distance operations
The Order prescribes different minimum rates for distribution operations and long distance operations.
For long distance operations, the Order now allows a hirer who engages a contractor driver to pay the contractor driver by an alternative method, provided the alternative method does not result in the hirer paying the contractor driver a lesser amount over a period of 28 consecutive days.
If using an alternative method to calculate any remuneration due, the hirer must:
- keep records setting out the amount the hirer would have had to pay under the prescribed method over the 28 day period and how that amount has been calculated;
- pay the contractor driver the difference between the amount the hirer has paid under the alternative method and the amount the hirer would have had to pay the contractor driver under the prescribed method over the 28 day period; and
- pay the difference within 30 days.
While such flexibility is welcome, the administrative burden created by the need to maintain time and kilometre records is likely to make this option unattractive.
For distribution operations, the Order includes transitional provisions that also allow a hirer to pay a contractor driver by an alternative method. However, these transitional provisions will expire at midnight on 3 October 2016.
If a hirer regularly engages a contractor driver over a 12 month period, the hirer must permit the contractor driver to take up to four weeks of unpaid leave during each 12 month period that follows.
Supply chain participants
Supply chain participants include consignors, consignees, intermediaries and operators of premises for loading or unloading.
Supply chain participants must take all reasonable steps to ensure that any contract they have with another party in the supply chain does not prevent or impede compliance by a hirer, who engages a contractor driver, with the requirements imposed by the Order.
Hirers are required to submit to annual compliance audits by a supply chain participant with which they contract for the supply of transport services. However, a hirer will not be required to submit to an audit if the contract provides (or contracts collectively provide) for the carriage of goods on less than 270 days in that financial year. This provision is designed to limit audits to supply chain participants who purchase services from a transport provider on average more than five days a week.
If the auditing party forms a reasonable belief that the Order has not been complied with, they must provide a written notice to the hirer:
- setting out the nature of the non-compliance and the action required to rectify it; and
- requiring the hirer to rectify the non-compliance within 28 days.
If the auditing party is not reasonably satisfied that the non- compliance has been rectified, they must immediately advise the Fair Work Ombudsman.
Promoting the Order
The Order must be displayed at each of the hirer’s work sites or depots and on each of the hirer’s websites. A hirer must also take all reasonable steps to advise contractor drivers of the existence and application of the Order, and where a copy of the Order may be accessed.
Impact on the road transport industry
The minimum rates of payments contained in the draft Order were extensively criticised by industry groups who argued that the rates did not reflect industry practice and were based on flawed methodology and assumptions.
In response to these concerns, the Tribunal has revised the minimum rates to exclude GST and depreciation and to take into account current industry wage rates. The Tribunal has commented that the detrimental impact of the final Order on the viability of road transport businesses, the national economy and the movement of freight across the nation is likely to be minimal. It concluded that the terms of the final Order ‘may well be positive as the productivity reducing and cost effects of road accidents and other occupational health and safety problems involving contractor drivers are diminished’.
Despite the Tribunal’s upbeat assessment of its new Order, there remains significant concern that that the revised minimum rates will threaten the viability and profitability of road transport businesses and jeopardise the livelihood of contractor drivers.
What steps must you take before April 2016?
Before the Order comes into force on 4 April 2016, parties caught by the Order must:
- in the case of transport operators, establish which subcontractors currently engaged are ‘contractor drivers’ who fall within the scope of the Order;
- in the case of supply chain participants, determine whether any of its transport services providers engage ‘contractor drivers’ who fall within the scope of the Order
- review contracts with any ‘contractor drivers’ or with any party that engages ‘contractor drivers’ and determine the remuneration payable under the Order;
- take steps to promote the Order to contractor drivers, and to display the Order on websites and in depots; and
- become familiar with the new obligations imposed by the Order and ensure that current computer systems allow tracking of hours and kilometres travelled by ‘contractor drivers’ so as to calculate payments due to those drivers.
This is information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice.
Fair Work Ombudsman Checklists
On 17 February, the Fair Work Ombudsman has revised the interpretation of the Order. To view the relevant changes to checklists, please use the link below:Fair-Work-Ombudsman-Checklist-Changes_17.02.16.pdf (pdf - 105 KB)
To assist in determining if you, or the driver you hire, are classified as a road transport driver, the Fair Work Ombudsman has developed a checklist. To access the checklists, please click on the links below.