Minimum rates for owner-drivers to begin on April 4

By: Brad Gardner, Photography by: Brad Gardner

The RSRT has decided not to delay the introduction of mandatory rates for owner-drivers.

Minimum rates for owner-drivers to begin on April 4
Road Safety Remuneration Tribunal president Jennifer Acton.


Mandatory minimum rates for owner-drivers will begin next week, forcing them and those hiring them to operate under a radically new pay structure or risk being slapped with $54,000 in fines.

The Road Safety Remuneration Tribunal (RSRT) today ruled it would not delay the introduction of minimum hourly and kilometre payments for owner-drivers.

From April 4, owner-drivers and businesses operating in the supermarket distribution and linehaul sectors will need to comply with the Contractor Driver Minimum Payments Road Safety Remuneration Order (RSRO).

The order fundamentally overhauls long-established remuneration practices in the trucking industry by applying employee-like conditions to owner-drivers. They will need to be paid for every hour they work and every kilometre they travel, with the rate varying based on the equipment being used, the class of the driver, and the task being performed.

Owner-drivers will also need to be paid for time spent waiting, queuing to load or unload, time spent filling out paperwork and time spent taking fatigue management rest breaks.

Those who fail to comply with the order can be fined up to $54,000.

The ruling comes despite owner-drivers and industry representative bodies lodging hundreds of submissions with the RSRT asking it to give the trucking industry more time to comply with the order.

Industry group NatRoad asked for the new rates scheme to be delayed until January 1 next year, while the Transport Workers Union (TWU), Linfox and Toll asked for a delay until October 1 this year and for the payments to gradually take effect. Even the Federal Government entered the debate to seek a delay.

But RSRT president Jennifer Acton says the industry has had enough time prepare itself given the tribunal first announced the RSRO in December last year and work on reforming rates began back in 2012.

"Following the consultation process, we have now decided not to vary the commencement date of the 2016 RSRO and not include a transitional provision regarding the minimum payments clauses in the 2016 RSRO. The commencement date of the 2016 RSRO remains as 4 April 2016," Acton says in her written judgment released today.

"It has been known since 18 December 2015 that the commencement date of the 2016 RSRO is 4 April 2016."

Acton says the first applications to the tribunal to delay the minimum rates scheme were not made until early March, while the TWU’s application was made just prior to hearings last week.

"The proposal came with no rationale, was not widely supported and was strenuously opposed by some, including for the reason that it was likely to create confusion," she says.

While a number of industry groups disagree, Acton says "it is evident that there is now significant support for the 2016 RSRO".

She says groups such as the Australian Industry Group, the Australian Road Transport Industrial Organisation (ARTIO) and the Australian Long Distance Owners and Drivers Association (ALDODA) only sought small delays to the commencement date of the order, as opposed to seeking changes.

"Nonetheless, it is true that some still appear to think it is 'un-Australian' for the 2016 RSRO to place restrictions on market practices that are a root cause of death and serious injury on our roads," Acton says.

The new minimum rates scheme is designed to ensure owner-drivers are paid enough to remain viable and do their jobs safely.

A 2008 National Transport Commission (NTC) study found that low rates of pay in the trucking industry led to poor safety outcomes.



Acton uses part of her ruling to refute claims that minimum rates for owner-drivers will harm the viability of trucking firms, including sending many out of business.

Acton says such claims stem from a misunderstanding of the minimum rates scheme and that many of those making the claims use few owner-drivers or do not need to comply with the RSRO at all.

"On the material before us, we are unable to conclude that the 2016 RSRO is, in general, likely to have an adverse impact on the viability of the businesses to whom the 2016 RSRO applies. Nor on that material are we able to conclude that the 2016 RSRO is, in general, likely to have an adverse impact on the viability of businesses in the road transport industry," Acton says.

"Examination and consideration of the submissions which suggested there is likely to be a detrimental impact on the viability of the businesses demonstrated that many of the submissions were based on misunderstandings about the operation of the 2016 RSRO, made by businesses that engage few contractor drivers and/or engage them irregularly, or made by businesses to whom the 2016 RSRO does not apply.

"The recent submissions that the 2016 RSRO is likely to have a significant detrimental impact on the national economy and the movement of freight across the nation because of its likely impact on the viability of businesses in the road transport industry must therefore be given little weight."



The RSRT president has also used her ruling to fire a shot at NatRoad, accusing it of peddling confusion and uncertainty about minimum rates for owner-drivers.

Acton says "NatRoad has never obtained any legal advice on the 2016 RSRO so as to assist their members with respect to their questions about the 2016 RSRO" despite the group telling its members it provides "unlimited industrial relations advice" and "legal advice".

Acton singles out NatRoad industrial relations specialist manager Arthur Spottiswood for particular criticism for issuing a release complaining about her not providing enough information to those who attended a briefing on the RSRT’s minimum rates order earlier this year.

"Yet Mr Spottiswood conceded under cross-examination and in a question from [RSRT] Senior Deputy President [Lea] Drake that he was an experienced industrial relations practitioner and was well aware that to expect any member of any tribunal to answer questions about a decision that the tribunal has made would be improper and that the President was correct in refusing to answer such questions," Acton states.

Acton’s ruling also takes Spottiswood to task for promoting a petition to NatRoad members claiming that the rates in the RSRO are 30 per cent higher than current market rates.

"Although Mr Spottiswood had written a press release on 11 February 2016 which indicated the increase in the 2016 RSRO were lower than that, he promoted the petition to NatRoad’s members," she says.

Acton also criticised the author of the petition, Metro Freight Lines general manager Daniel Cozzolino, for publicising that figure despite knowing the proposed rates in some cases were less than existing rates.

The Fair Work Ombudsman (FWO), too, has worn criticism for how it has gone about educating the industry about minimum rates. The FWO is responsible for enforcing the RSRT’s ruling and making sure the industry has the knowledge and resources to comply.

Acton says the FWO has created uncertainty and confusion by "inadequately performing its functions in respect of the 2016 RSRO".

"It is disappointing that affected persons could not rely on the Fair Work Ombudsman and scandalous that some bodies and persons have sought to create uncertainty and confusion by actions or omissions," Acton says.

"In some cases this conduct by bodies has amounted to an absolute abdication of their responsibilities to their members and the explanations provided have been disingenuous and implausible."

The RSRT’s decision today coincides with the release of two reviews of the agency, one in 2014 and the other this year.

Both reviews question the need for the tribunal, with the 2016 review advocating the RSRT’s abolishment.

The 2014 review, which was until today kept under wraps by the Federal Government, recommends changing the current form of the RSRT and stripping it of the power to set rates.

The Federal Government says it will consult the industry about the findings of both reports.


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