New regulator proposed for the road transport industry

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25 November 2011

The Road Safety Remuneration Bill 2011 (RSR Bill) was introduced into federal Parliament earlier this week. The RSR Bill is intended to address underlying economic factors that the federal Government considers encourage unsafe practices in the Australian road transport industry.

The RSR Bill proposes to establish an additional regulatory framework for the road transport industry, applying to road transport drivers (both employees and owner drivers), employers, hirers and participants in the supply chain.

The aim is to promote safety and fairness in the industry by:

  • ensuring that road transport drivers do not have remuneration-related incentives to work in an unsafe manner (eg speeding and working excessive hours), and removing such pressures and practices;
  • ensuring road transport drivers are paid for their work, including loading and unloading vehicles or waiting for other persons to load/unload their vehicles; and
  • developing and applying reasonable enforceable standards throughout the industry.

The RSR Bill is designed to complement existing regulation under the Fair Work Act 2009 (Cth) (FW Act), the Independent Contractors Act 2006 (Cth), state laws dealing with owner driver contracts (in NSW, Victoria and WA), and the proposed National Heavy Vehicle laws.

Implications of the RSR Bill

  • The RSR Bill is the federal Government’s response to the 2008 National Transport Commission Report Safe Payments Addressing the Underlying Causes of Unsafe Practices in the Road Transport Industry and the Safe Rates, Safe Roads Directions Paper. It also follows many years of campaigning by the Transport Workers Union (TWU) for specific measures to address their concerns about unsafe conditions for drivers in the road transport industry.
  • If the RSR Bill is enacted, it is envisaged that a Road Safety Remuneration Tribunal (RSR Tribunal) would commence operation on 1 July 2012. The Government’s chances of having the RSR Bill passed have been enhanced by the new configuration in the House of Representatives; it now needs the support of only three cross-bench members to secure the passage of legislation in the lower house.
  • The RSR Bill presents road transport industry operators with the prospect of new industrial instruments supplementing the terms and conditions in existing awards for employee drivers – and increased regulation of the engagement of contractors/owner drivers, including collective bargaining-type arrangements.
  • Significantly, the RSR Bill would also result in other participants in the transport industry supply chain being drawn into the dispute resolution framework overseen by the RSR Tribunal.
  • At this stage, direct employers/hirers of transport industry drivers, and supply chain participants, should give some thought to how the RSR Bill (if enacted) could affect their operations – in particular, how the TWU might seek to utilise this new regulatory framework to enhance minimum rates and conditions for employees and owner drivers.

Coverage and application of the RSR Bill

The RSR Bill would apply to employee drivers and their employers, hirers and independent contractors, and supply chain participants in the “road transport industry” – ie the sectors of the industry defined in the Road Transport and Distribution Award 2010, the Road Transport (Long Distance Operations) Award 2010, the Transport (Cash in Transit) Award 2010 and the Waste Management Award 2010.

“Supply chain participants” include consignors and consignees; intermediaries in the provision of road transport services; and operators of premises for loading and unloading (eg distribution centres, ports), but only if these are used for loading/unloading five or more vehicles per day.

Road Safety Remuneration Tribunal

The RSR Bill would establish the RSR Tribunal, comprising some members of Fair Work Australia (FWA) and members with experience in issues relevant to the road transport industry. 

The RSR Tribunal would be responsible for:

  • preparing and publishing an annual work program (identifying matters that will be the subject of inquiry in the year ahead);
  • making “road safety remuneration orders” (RSROs) with application to employed and/or self-employed drivers;
  • making “safe remuneration approvals” (SRAs) relating to collective agreements between a hirer and its self-employed drivers; and
  • resolving disputes between drivers, employers/hirers, and supply chain participants about remuneration and related conditions.

Road safety remuneration orders (RSROs)

It is proposed that RSROs made by the RSR Tribunal will set out minimum remuneration and related conditions for road transport drivers. RSROs could be made by the RSR Tribunal on its own initiative, or on the application of a road transport driver, an employer/hirer, a supply chain participant, or a relevant union or employer association.

An RSRO may contain, for example:

  • conditions about minimum remuneration and other entitlements for an employee road transport driver that are additional to minimum conditions prescribed in the modern awards referred to above;
  • conditions about minimum remuneration rates and conditions of engagement for owner drivers;
  • conditions about industry practices for loading and unloading vehicles, waiting times, working hours, load limits and payment methods/periods;
  • ways to reduce/remove remuneration-related incentives, pressures and practices (including in the supply chain) which contribute to unsafe work practices.

The power to make RSROs would be subject to certain limitations.  For instance, they may only be made by a Full Bench of the RSR Tribunal, following a consultation process in relation to a draft order (including the opportunity for affected parties to make written submissions).  In making an RSRO, the Tribunal must also have regard to certain specified matters, including:

  • the impact of any order on the viability of businesses in the industry, and on the national economy and freight movement;
  • the special circumstances of areas that are particularly reliant on the road transport industry (eg rural and regional areas);
  • orders and determinations made by the Minimum Wage Panel of FWA;
  • relevant modern awards and the reasons for those awards; and
  • the need to avoid unnecessary overlap with the FW Act and other applicable laws.

RSROs will operate for no more than four years, after which they will cease to have effect.  The failure to comply with a requirement under a RSRO will attract a civil penalty (up to $6,600 for an individual or up to $33,000 for a body corporate).

Safe remuneration approvals (SRAs)

The RSR Tribunal would be empowered to make an SRA in relation to a “road transport collective agreement” – ie an agreement between identifiable independent contractor driver(s) and a hirer (or potential hirer). An SRA would set down remuneration and related conditions that the hirer is required to provide to all owner drivers providing the services to the hirer.

There are certain matters about which the RSR Tribunal would have to be satisfied before granting an SRA for a road transport collective agreement. These include that an RSRO must be in effect in respect of the participating drivers; that the majority of the participating drivers would be better off overall if the agreement applied (rather than the RSRO); that a majority of the participating drivers approved the agreement; and where the term of the agreement is longer than 12 months, provision is made to enable remuneration to be adjusted.

Where an RSA is granted, the RSR Tribunal must make a written statement that “remuneration and any related conditions in the agreement are adequate to ensure that road transport drivers do not have remuneration-related incentives to work in an unsafe manner”. 

Once granted, the hirer specified in the SRA must not provide remuneration or related conditions to any road transport drivers providing applicable services to the hirer that are less beneficial than those under the SRA, regardless of whether the drivers are participating drivers in relation to the agreement. 

Like RSROs, it is proposed that SRAs will operate for no more than four years.  During this time, an otherwise applicable RSRO will have no effect.  A failure to comply with an SRA will also attract civil penalties.

Dispute resolution

The RSR Tribunal would have the power to deal with disputes between employee drivers and their employers; owner drivers and their hirers; and disputes involving supply chain participants.

These disputes may relate to the remuneration or related conditions of employee drivers/owner drivers that could affect whether the driver works in an unsafe manner, and disputes arising from the dismissal/termination of the contract of an employee/owner driver because the driver refused to work in an unsafe manner.

Disputes involving supply chain participants would relate to circumstances where an employer or hirer argues that the practices of another party in the supply chain affect the employer/hirer’s ability to provide remuneration/conditions that do not offer incentives to work in an unsafe manner.

The RSR Tribunal would be able to deal with disputes in much the same manner as FWA is empowered to resolve disputes under the FW Act – including mediation and conciliation, but arbitration only if the parties to the dispute agree.

Compliance

The RSR Bill would also create a compliance framework similar to that operating under the FW Act, in that certain provisions are designated as civil remedy provisions which could be enforced through proceedings in the Federal Court, Federal Magistrates Court and state and territory courts.

Enforcement functions would be undertaken by the Fair Work Ombudsman, which would also have an education and advisory role.  Union rights of entry under the FW Act would be extended to allow entry to investigate breaches of the RSR legislation and instruments made under it.

Further, the RSR legislation would be considered a “workplace law” for purposes of the “general protections” provisions in the FW Act, so that a person exercising “workplace rights” (eg initiating a proceeding under the RSR legislation) would potentially be able to make a general protections claim if they were subjected to “adverse action” for having done so.

Contacts

Jack de Flamingh

Partner. Sydney
+61 2 9210 6192

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John Tuck

Partner. Melbourne
+61 3 9672 3257

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Nicholas Ellery

Partner. Perth
+61 8 9460 1615

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