We want fixed rates for owner-drivers by 2016: RSRT

Tribunal proposes minimum hourly and kilometre rates with annual 3.2 per cent increases.

Contractor drivers delivering freight to supermarkets or engaged in linehaul work could be guaranteed minimum pay rates within months under a proposal from the Road Safety Remuneration Tribunal (RSRT).

The federal agency has put forward a plan to overhaul existing payment methods for drivers classified as independent contractors and ensure they receive minimum hourly and kilometre rates similar to employees.

The culmination of more than two years of work, the draft Contractor Driver Minimum Payments Road Safety Remuneration Order (RSRO) outlines schedules of rates trucking companies must pay contractor drivers involved in long distance operations or delivering goods destined for sale on supermarket shelves.

It mandates payment for fatigue management breaks and requires companies to pay contractors for the time spent queuing; loading or unloading; cleaning, inspecting or repairing a vehicle; refuelling a vehicle; completing paperwork and waiting in a location because of a natural disaster.

Contractor drivers must be given the option of taking up to four weeks of unpaid leave each year, while the order also contains provisions on supply chain contracts and dispute resolution.

The RSRT wants minimum payments to begin on January 1 next year and increase by 3.2 per cent annually until December 31, 2019, at which time the order will be reviewed.

Despite protests from employer groups about minimum payments for contractors, RSRT president Jennifer Acton says it is necessary for the tribunal to act.

“The material at this stage suggests a need to apply fair, reasonable and enforceable standards in the road transport industry to ensure the safety and fair treatment of road transport drivers,” a statement from Acton says.

“The terms of the draft Payments RSRO, concerning minimum payments and unpaid leave for contractors and the other supportive provisions, are aimed at providing such standards.”

The draft order proposes hourly payments for each hour the contractor spends providing the relevant service, while kilometre rates will cover each kilometre the driver travels while completing the work required.

There is also a provision requiring contractors to receive a supplementary rate if half or more of the work carried out occurs in Tasmania, regional Western Australia or the Northern Territory.

The RSRT has produced an online calculator to help companies and contractors determine the level of rates that must be paid.

DETERMINING RATES

The order is essentially a contractor version of the federal employment Awards in place for employee truck drivers — the Road Transport and Distribution Award and the Road Transport (Long Distance Operations) Award —and uses a similar methodology for determining the level of payment to be made.

Under the proposal, companies using contractors will need to pay them based on a grading, the type of trailer and vehicle being used and whether the contractor is providing the equipment.

The gradings categorise drivers according to the vehicle type and class they are using. Likewise, the type of trailer being used will also determine the level of payment.

The schedule of rates is taken from a report consultancy firm KPMG did for the tribunal earlier this year.

“Different rates apply depending on the contractor driver’s Transport Worker Grade, whether the trailer used in the provision of the road transport service is supplied by the hirer or the contractor drivers, the type of trailer supplied, whether the vehicle used in the provision of the road transport service is supplied by the hirer or the contractor driver and the class of vehicle supplied by the contractor driver, as well as whether 50% or more of the kilometres travelled occur in the Northern Territory, Tasmania or regional Western Australia,” the statement from Acton says.

She says the proposed yearly 3.2 per cent rate increases are based on the average annual wage increase in enterprise agreements the Fair Work Commission (FWC) has approved.

SUPPLY CHAIN TO BE HELD ACCOUNTABLE

The draft order seeks to ensure trucking companies using contractors are not unfairly burdened, with the RSRT proposing conditions on parties higher up the supply chain.

A clause relating to supply chain contracts says a participant in the chain — such as a consignor or consignee — must ensure any contract it has with another party in the chain contains provisions consistent with the RSRO.

The draft order says supply chain contracts must be sufficient to allow compliance with the RSRO and include annual compliance audits.

It means big businesses high up the chain will need to pay trucking companies enough so those companies using driver contractors can pay them the rates required.

“A participant in the supply chain (the first party) in relation to a road transport driver must take all reasonable measures to ensure that any contract it has with another participant in the supply chain (the second party) contains provisions which…are sufficient for the second party to comply, or be permitted to comply, with the requirements this order imposes on the second party…,” the draft order states.

The clause covering supply chain contracts says parties at the top of the chain must take action if they suspect a trucking company is breaching the order. This includes written notice, notifying the Fair Work Ombudsman — which enforces the RSRT’s rulings — or terminating the contract.

CRITICS OF MINIMUM RATES LACKED EVIDENCE

The Retail Council, which represents Coles, Woolworths, David Jones, Costco and other big-name retailers, criticised KPMG’s schedule of rates as being “substantially higher” in some cases than the market rates supermarket consignors currently pay fleet transport operators.

A joint submission from the Australian Industry Group, NatRoad and Road Freight New South Wales made similar claims.

“Our members have provided anecdotal responses to the KPMG Research indicating that the rates are, at least in certain circumstances, significantly above market rates. Indeed some have suggested that certain rates are as much as 20% to 30% above market rates,” the submission states.

The RSRT gave all parties the opportunity to provide evidence to back up their claims if they expected the tribunal to take them seriously, but none did.

“No party provided the required analysis and data to the RSRT. We draw no negative inference from the non provision of the material. However, we would expect that in any future submissions the parties will provide the analysis and data that underpins their submissions,” Acton says.

INDUSTRY CAN HAVE ITS SAY

While it insists minimum payments for contractors are necessary, the RSRT has also emphasised that the payments RSRO is a draft only and open to feedback.

“The draft Payments RSRO has been prepared and published for the consideration of interested persons,” Acton says.

“At this stage, the RSRT has made no decision on whether or not to make a RSRO based on the draft Payments RSRO.”

She says those wishing to lodge written submissions must do so by September 23.

Comments in response to submissions must be lodged by October 7.

If required, hearings will take place from October 17 to October 25.

The RSRT says the online payments calculator is also open to comment and feedback.

Photography: Brad Gardner