Passionate owner-driver stares down tribunal on minimum rates

By: Brad Gardner


Sean Hester has taken the RSRT to task for its decision to impose minimum rates on owner-drivers.

Passionate owner-driver stares down tribunal on minimum rates
Sean Hester says the RSRT's minimum rates scheme will send owner-drivers out of business and damage the used truck sales market.

 

A one-man trucking operation has fronted the Road Safety Remuneration Tribunal (RSRT) to warn its decision to impose minimum rates on owner-drivers will send many to the wall.

In a passionate and off-the-cuff speech during the RSRT’s hearing on applications to vary the start date of minimum rates, Sean Hester took senior tribunal members to task and asked them how owner-drivers would be able to survive under a rates scheme he claimed put them at a competitive disadvantage.

A number of industry representative groups and individuals are highly critical of the RSRT’s decision to set mandatory rates for owner-drivers, with many saying they will price them out of the market because large transport companies will be free to charge lower rates.

"I tell you what, a lot of people have invested a lot of money in their equipment, they are going to lose the lot. I’ve seen grown men crying over this," Hester, who operates Hestco Holdings from his base in Victoria, told the tribunal.

"Through no fault of their own, their whole livelihood, everything they’ve put in, is being taken away like that. It’s just not fair, it’s not right!"

Hester told the tribunal his business is currently profitable but that he would be forced to almost double the $2200 rate he charges for one of his runs just to comply with the tribunal’s minimum rates ruling.

"My little client who spends approximately $600,000 a year on freight is now going to face a doubling in his freight bill. He employs 40 people in his little business down in Melbourne. He’s told me he can’t sustain that…So what happens to those 40 people down there and to me because the freight rates had to double?" the owner-driver asked.

"The other question I have is how does my business compete with the bloke who doesn’t fit this criteria? He can continue doing the job at $2200 but under legislation I have to charge $4500."

Unless it varies its decision handed down in December last year, the RSRT will require owner-drivers to be paid minimum hourly and kilometre rates from April 4, including payment for waiting time, loading and unloading freight, taking rest breaks and completing paperwork.

Hester, who appeared in Brisbane for the RSRT hearing, said the tribunal needed to reform the industry as a whole instead of targeting a single sector.

"I understand the purpose of it was to get a safe rate, but to only include the owner-drivers it just doesn’t work. If you want to reform and regulate the industry you need to do it across the board."

He criticised the RSRT for setting a one-size-fits-all payment, saying there were too many variables in the trucking industry to apply a blanket rate.

"You don’t know what the cost structure of my business is. Per kilometre it is a hell of a lot cheaper than Toll, Linfox etc because I don’t have the overheads that they do," Hester said.

"So how did you come up with this? I know you’ve had reports done by KPMG, but you don’t know what the cost structure of my business is, you don’t know what profit I need to earn.

"So you can’t tar everybody with the one brush by having a rate. It’s just inconceivable. You can’t do it, there’s too many variations and variables within our industry."

 

MINIMUM RATES WILL HAVE FLOW-ON EFFECTS

While much of the focus of the debate on minimum rates has been on the impact it will have on owner-drivers, Hester told the tribunal the reform would be felt more broadly.

"What’s going to happen to the second-hand truck market? Owner-drivers are the biggest purchasers of second-hand trucks. What happens to the new truck market when the big companies can’t trade their trucks in?" He asked.

"So instead of the big companies turning their trucks over in three to five years, they’ll hang on to them for seven to 10 because there’s no market to sell them to. This is just taking a whole market away."

Hester directed his comments at the three tribunal members conducting the hearing: RSRT president Jennifer Acton, senior deputy president Lea Drake and professor Ann Williamson.

He attempted on more than one occasion to ask the members to tell him the current going rate for a sub-contractor carting general freight from Melbourne to Brisbane.

Hester told them they should know given they were making decisions affecting pay rates for owner-drivers, but Acton would not answer him.

"Mr Hester, you misunderstand the nature of the proceedings. The purpose of the proceedings is for you to make submissions to us, not for us to answer your questions," Acton told him.

"You cannot expect us to answer your questions and we will not do so."

Hester, who had spent the morning of the RSRT hearing unloading his truck and was due to travel to Gladstone that afternoon, eventually had his speech cut short when Acton told him to lodge a written submission.

He responded that he would and then fired a parting shot at the RSRT.

"Shame on this whole organisation. Honestly, it’s a goddamn farce!"

 

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