Initial findings of Ombudsman inquiry reveal that the minimum rates order was unfair to owner-drivers
Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell says the Contractor Driver Minimum Payment Road Safety Remuneration Order (RSRO) was discriminatory against small operators and owner-drivers and had the potential to make them uncompetitive in the market.
The statement comes as the Ombudsman’s office finalises its report following a formal inquiry into the effects of the minimum rates order on small transport businesses.
The inquiry, which was launched following a request by small business minister Kelly O’Dwyer, also looked at ways the government could consult with small businesses in the development and operation on tribunals and other similar bodies.
Carnell outlined the key findings of the report during the Livestock and Rural Transporters Association Victoria (LRTAV) annual conference last weekend.
The Ombudsman’s office carried out stakeholder consultations including industry roundtable, radio interviews with owner-drivers and community meetings at various venues across the country.
It reviewed stakeholder submissions, transcripts and decisions of the Road Safety Remuneration Tribunal (RSRT), government reports, RSRT review reports and data from sources such as the Australian Financial Security Authority (AFSA), the Bureau of Infrastructure, Transport and Regional Economics (BITRE) and the National Transport Insurance (NTI).
The inquiry explored the impact of the minimum rates order in the months leading up to the commencement, during its operations and after its abolition.
The results of the ASBFEO findings indicate that the safe rates RSRO was “discriminatory to owner drivers and family businesses”, Carnell says.
“The fact that it didn’t affect all trucks, it didn’t affect employee drivers, made it, from the beginning, unfair.
“There was no evidence to suggest that owner-operators were less safe than employee drivers, in fact possibly the opposite, but certainly no evidence to suggest there was a reason why you would have a payment order that was supposed to be about road safety that only affected one group of people in the industry.
“We looked high and low, not just in the tribunal, not just in a determination, but all over the place to try to find any evidence if this was the case and we found none.”
The findings also reveal that the minimum rates order imposed “significant” financial and emotional stress on mum-and-dad businesses.
“There was a high level of uncertainty and confusion for owner drivers about the payment order, due, in large part, to its complexity and the short implementation period.
Carnell says the situation was aggravated during the election period because both leading parties held different views in the matter.
“Overall, we found the tribunal to be gratuitously legalistic, adversarial and not friendly towards small operators.
“For many owner-drivers, this was their first experience with this kind of process; they were unaware of proper procedures, and as a result were unprepared for what followed.
“By and large, it became clear through the evidence we gathered that tribunals of this nature are not suited to the development of this kind of regulation or to dispute resolution.”
However, the Ombudsman notes that the 30-day payment rule was one of the few positives in the minimum rates order – an approach it has included in its recommendation to the government.
“Payment times are a problem in the industry. One of the good things about the tribunal’s determination was the 30-day payment approach that was recommended.
“We got evidence of quite long times for smaller companies to be paid by some of the bigger players so we’ve suggested that there needs to be a very close look at security of payments or 30-day maximum payment rules where it is appropriate.”
The approximately 30-page ASMFEO report will include “solid recommendations” for the government and highlight areas that need more focus.
“Some of the other issues that came up in our discussions include the continuing problems associated with different laws in different states and issues surrounding inflexibly of fatigue laws.
“We have highlighted a range of those of those issues, some of which are being handled by the National Heavy Vehicle Regulator [NHVR], some which aren’t, with a view that further work really needs to be done.
“There is still a range of issues that are floating around out there that discriminate heavily against smaller operators, small businesses and family enterprises in the industry and they are issues that need to be addressed.
“We have put forward views of a number of players who have put in submissions to us, with some suggesting that there needs to be a look at things like compensation.”
However, the Ombudsman’s office has not included a compensation clause in its recommendations list because, as Carnell explains, it can be an uphill task to provide factual evidence to prove what was the cause of the effect.
Carnell also criticised the RSRT handling of the hearings over the Easter period.
The hearings showed lack of respect for small operators and unreasonable treatment of people who had little understanding of legal procedures, Carnell says.
The report is currently in its final stages and will be presented to the minister in the coming weeks.