Mandatory rates for owner-drivers mean more compliance costs for retailers


Retailers face extra costs, as lawyers complain about proposed payment structure for contractors.

Mandatory rates for owner-drivers mean more compliance costs for retailers
The RSRT's proposal, if introduced, will require audits to ensure contractor drivers are being paid correctly.

 

A plan to introduce mandatory minimum rates for contractor truck drivers will impose significant compliance responsibilities on retailers, legal experts say.

The Road Safety Remuneration Tribunal (RSRT) recently proposed minimum hourly and kilometre rates for contractors that will vary based on the model of truck and trailer being used.  

The draft Contractor Driver Minimum Payments Road Safety Remuneration Order, if introduced, is expected to require retailers to research, manage, audit and report non-compliance in their transport functions and possibly audit transport companies and drivers annually.

"The additional compliance costs will be substantial," Andrew Farr and Daniel Proietto of law firm Lander & Rogers say.

The lawyers say customers will need to make sure their contracts are consistent with the RSRT's order and have terms and conditions that allow transport operators to meet with compliance obligations.

They add that the retailer also has "an obligation directly to a road transport driver to audit the relationship between the transport provider and the road transport driver".  

"This is even though there may be no relationship whatsoever between the retailer and the road transport driver," they say.

"This obligation arises if the contract between the retailer and the transport provider is open ended or where the contract between the retailer and the transport provider are for periods of least 30 days in each year."

If retailers give transport providers notice of non-compliance, failure to rectify it after a "reasonable period" allows for the contract to be terminated.

Farr and Proietto believe the order will inject significant extra costs into the supply chain as minimum payments rise.

Meanwhile, the proposed payment structure from consultancy firm KPMG that is contained in the draft order has been criticised.

Maurice Baroni and Rosemary Patti of McCabes lawyers say KPMG’s assumptions fail to take account of variations in respect of distance travelled, hours worked, fuel consumption and the cost of capital which arise in different sectors of the transport industry, and the size and type of the transport vehicle.

"Our view is that the KPMG Report currently adopted by the Tribunal makes unrealistic assumptions that should not form the basis of determination of pay rates in the transport industry."

The trucking industry has three weeks to lodge responses to the RSRT's proposed order. A final hearing on the order is due next month.

 

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