We have set out how some owner drivers may be able to seek compensation for the rising cost of fuel. We’ve included hyperlinks so you can locate additional information and work out if this applies to your business.
The current fuel shortage is causing anxiety for many businesses across Australia. Some transport businesses have contracts that, fortunately for them, provide for fuel levies, and are either currently, or may soon be, entitled to receive increased payments from customers.
However, there are some situations where owner drivers may be entitled to extra payments for fuel, even if they have no formal written contract.
What are the rights of owner drivers under legislation?
Owner drivers in Victoria and Western Australia may be entitled to additional payments or higher rates to cover fuel costs if their principal contractor is collecting an increased fuel levy from its customers.
In Victoria, when a business is benefiting from a fuel levy, they likely need to pass this on, proportionately, to the owner driver/s contracted to undertake the work.
If the contract between the principal contractor and the owner driver does not provide for proportional payments, or benefits to the owner driver in the same circumstances, then the relevant term is likely to constitute an “unjust contract term”.
Similarly, if there is no written contract between the business and the owner driver, and the business refuses to negotiate an increased rate with the owner driver, instead pocketing the extra money, this business could be engaging in “unconscionable conduct”.
Here’s the example given on the Victorian government webpage to illustrate this:
Nina runs a 2-tonne van. In 5 years, her hirer has only increased the rates paid to its contractors by $1 an hour. At the beginning, Nina earned $900 a week on average, of which about $270 was spent on fuel. Because of the significant increase in the cost of fuel over the last 5 years, Nina is now spending over $450 a week on fuel, and the total return for her labour and investment is now well below $10 an hour. The company refuses to negotiate a new rate, saying the market is too competitive. However, the company’s contracts with its customers allow it to charge an increased price whenever the cost of fuel increases by more than 5 cents a litre. The company simply pockets this customer price increase as it is the contractors who pay for the fuel. This conduct is likely to be unconscionable conduct within the meaning of section 31 of the Act, and Nina could notify a dispute to the Small Business Commission.
In Western Australia, when a business is benefiting from a fuel levy, that business must pay to the owner-driver/s (who are actually providing the services), a fair and reasonable amount to cover fuel cost fluctuations.
Which ‘owner drivers’ can rely on these laws?
To be able to rely on the legislation, your business needs to meet the definition of ‘owner driver’ under the relevant Act. The definitions are complicated and a business can be an ‘owner driver’ even if it has multiple vehicles. To work out if your business qualifies, see these webpages:
How can owner drivers enforce their rights?
Owner drivers in Victoria and Western Australia not receiving additional payments or higher rates should be talking to the businesses contracting work to them. However, if this is not fruitful, and the owner driver knows or suspect that their principal contractor is benefiting from increased fuel levies due to the current crisis, there are lawful options for pursuing this further.
Victorian owner drivers can notify a dispute to the Victorian Small Business Commission (VSBC). If the dispute is not resolved at VSBC, the matter can be referred to the Victorian Civil and Administrative Tribunal, which may make various orders, including an order for compensation or damages.
Western Australia owner drivers can lodge a dispute with the Road Freight Transport Industry Tribunal. If this Tribunal arbitrates the dispute, it may make various orders, including ordering payment of a sum of money.
Disclaimer: This information is provided for general information purposes only and does not constitute legal advice.
