[2015] RSRTFB 15
Road Safety Remuneration Tribunal

DECISION



Road Safety Remuneration Act 2012

s.18 RSR Act – Tribunal must prepare and publish a work program each year
s.19(2) RSR Act – Road safety remuneration order application
s.22 RSR Act – Tribunal to prepare and consult on draft order
s.27 RSR Act – Making road safety remuneration order

Third Annual Work Program

(RTP2014/1)

Transport Workers’ Union of Australia
(RTO2013/1 and RTO2015/3)
Australian Road Transport Industrial Organization
(RTO2013/2)
National Union of Workers
(RTO2013/3)
Intercapital Trucking Pty Ltd
(RTO2013/4)
Steven Corcoran
(RTO2013/5 and RTO2014/1)

PRESIDENT ACTON
COMMISSIONER HAMPTON
PROFESSOR WILLIAMSON



MELBOURNE, 18 DECEMBER 2015

Road safety remuneration order (RSRO) – Payments for contractor drivers – Unpaid leave – Supply chain contracts – Promotion of orders.

Contractor Driver Minimum Payments Road Safety Remuneration Order 2016

CONTENTS                                                                                                                                     Paragraph

Introduction

[1]

Research, consultations and hearings

[6]

Submissions, material and comments on the clauses in the draft RSRO and other clauses

[31]

1. Title

[31]

2. Commencement and expiry

[32]

3. Definitions and interpretation

[38]

4. Application

[43]

5. Promotion of orders

[60]

6. Savings clause

[70]

7. Dispute resolution

[74]

8. Supply chain contracts

[77]

9. Minimum payments for a distribution operation

[91]

10. Minimum payments for a long distance operation

[91]

11. Facilitative provisions

[100]

12. Unpaid leave

[118]

Schedule A – Minimum payments for a Distribution Operation

[129]

Schedule B – Minimum payments for a Long Distance Operation

[129]

Other clauses

[174]

(a) Supply chain transparency

[174]

(b) Alternative systems of remuneration

[176]

Jurisdiction

[189]

Matters the RSRT must have regard to in deciding whether to make a RSRO

[218]

Conclusion

[243]

Attachment A – Contractor Driver Minimum Payments Road Safety Remuneration Order 2016

 

Attachment B – Persons who presented submissions, material and comments on the draft RSRO

ABBREVIATIONS

ABI

Australian Business Industrial

ACCI

Australian Chamber of Commerce and Industry

Ai Group

Australian Industry Group, The

CC Act

Competition and Consumer Act 2010 (Cth)

draft RSRO

draft Contractor Driver Minimum Payments Road Safety Remuneration Order 2016

FW Act

Fair Work Act 2009 (Cth)

FWC

Fair Work Commission

GST

Goods and Services Tax

GWF

George Weston Foods Limited

KPMG report

independent research project report by KPMG

Linfox

Linfox Australia Pty Ltd

NatRoad

National Road Transport Association Limited

NITA

National Independent Trucking Association Inc

NSW Business Chambers

NSW Business Chamber Limited

NSW General Carriers Contract Determination

Transport Industry – General Carriers Contract Determination (NSW)

NTC

National Transport Commission

Retail Council

Retail Council Limited

Road Freight NSW

NSW ATA Pty Ltd

RSR Act

Road Safety Remuneration Act 2012 (Cth)

RSR Bill

Road Safety Remuneration Bill 2011

RSR Regulation

Road Safety Remuneration Regulation 2012

RSRO

road safety remuneration order

RSRT

Road Safety Remuneration Tribunal

TNT

TNT Australia Pty Ltd

Toll

Toll Holdings Limited

TWU

Transport Workers’ Union of Australia

2014 RSRO

Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014

2016 RSRO

Contractor Driver Minimum Payments Road Safety Remuneration Order 2016

Introduction

[1] This decision establishes minimum payments for contractor drivers in the road transport industry providing a road transport service involving distribution operations in relation to a supermarket chain and contractor drivers in the road transport industry providing a road transport service involving long distance operations.

[2] It also provides for unpaid leave for such contractor drivers, as well as other provisions aimed at promoting the observance of the minimum payments and knowledge about the road safety remuneration orders (RSROs) covering road transport drivers.

[3] The provisions are contained in the Contractor Driver Minimum Payments Road Safety Remuneration Order 20160F 1 (2016 RSRO), which is set out at Attachment A to this decision.

[4] In this decision we detail the research, consultations and hearings leading to the 2016 RSRO and then set out the material and submissions on the clauses in the draft Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 2 (draft RSRO) that we published in August 2015 as well as the other clauses proposed by parties. Subsequently we consider jurisdictional issues and the matters the Road Safety Remuneration Tribunal (RSRT) must have regard to in deciding whether to make a RSRO, before concluding.

[5] Accordingly, we now turn to detail the research, consultations and hearings leading to the 2016 RSRO.

Research, consultations and hearings

[6] The establishment of the minimum payments and other provisions follows extensive research, consultations and hearings.

[7] In 2013, the RSRT issued a RSRO, the Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 3 (2014 RSRO), providing certain minimum conditions, but not minimum payments, for these contractor drivers.

[8] In the decision making the 2014 RSRO, the RSRT summarised the various submissions that had been made to it on minimum payments but declined to make a RSRO in respect of the matter. Instead the decision indicated that the President of the RSRT would convene a conference of interested parties on the matter, with the matter to be the subject of further proceedings. 4

[9] The decision referred to the research material presented to the RSRT on the relationship between remuneration and safety in the road transport industry and material presented from government-initiated and other inquiries into the road transport industry, as well as the evidence before the RSRT concerning the relationship between remuneration and safety. 5

[10] In the more recent submissions and proceedings leading to this decision, some have continued to question whether there is any relationship between remuneration and safety and/or suggested the material to which we have just referred is dated. Nothing persuasive, however, has been put to lead us to conclude the substance of the material is not relevant to this decision.

[11] The nature of the relationship between remuneration and safety is set out in a diagram contained in the report, “Safe Payments: Addressing the Underlying Causes of Unsafe Practices in the Road Transport Industry”, 6 from the 2008 inquiry established by the Australian Transport Council. The 2008 inquiry was part of the National Transport Policy Framework and was conducted under the auspices of the National Transport Commission (NTC). We set out part of that report and the diagram in the decision making the 2014 RSRO. We think it is worth repeating. The report from the 2008 inquiry stated:

“Although considerable work has been undertaken to this point to demonstrate the link between safety outcomes and truck driver pay rates or methods, the new report by Professor Michael Quinlan and the Hon Lance Wright QC draws all this information together, and, with the addition of new evidence from stakeholders, conclusively determines the existence of this link...

2.6 NTC conclusion on the existence of the link

The conclusion of the Hon Lance Wright QC and Professor Michael Quinlan, together with the previous work undertaken in this area confirms that there is a link between how and how much truck drivers are paid and poor safety outcomes. The NTC believes that there is sufficient evidence which points to a link between rates and methods of payments, and a variety of on-road behaviours which are acknowledged contributors to truck crashes.

The NTC considers that this is a tripartite link:

tp://www.rsrt.gov.au/default/assets/File/decisions-files/2013rsrtfb7-1.gif

Figure 4. Link between safety outcomes and economic pressures

The clear evidential links shown recognise that those on-road behaviours, in particular driving while fatigued, under the influence of stimulants or driving in excess of speed limits are factors that cause vehicle crashes. The NTC acknowledges that vehicle crashes are usually a result of multiple factors.

As noted by Professor Michael Quinlan and the Hon Lance Wright QC in their report, ‘safety outcomes’ in this discussion should not be limited to a simple analysis of crash data, but rather, consider the broader occupational health and safety outcomes and implications that economic pressures on drivers may create or encourage…

While it cannot be shown that low rates of pay and methods of payments directly cause truck crashes, a point argued by several submissions, it can be shown that low rates of pay and performance based payment systems do create an incentive for, or encourage, other on-road behaviours which lead to poor safety outcomes…

The NTC believes that until the root causes of unsafe driving practices are addressed, addressing the on-road behaviours will never sufficiently resolve the safety problem.

The NTC endorses the conclusion reached by Professor Michael Quinlan and the Hon Lance Wright QC as to the confirmation of the existence of a link between economic pressures faced by drivers and the unsafe on-road behaviours that lead to poor safety
outcomes.” 7

[12] The report from the 2008 inquiry concluded that:

“The issue of whether rates and methods of remuneration lead to poor safety outcomes had been debated and discussed for many years, the report from Professor Michael Quinlan and the Hon Lance Wright QC determines the existence of this link.

Economic factors create an incentive for truck drivers to drive fast, work long hours and use illicit substances to stay awake. These economic factors include, low rates of pay, incentive based payment methods (such as per kilometre or per trip), unpaid working time and demurrage. Other factors include the hyper-competitive nature of the industry and the low bargaining power faced by drivers.” 8

[13] The aforementioned conference before the President on minimum payments was conducted in February 2014. 9

[14] Subsequently, the RSRT invited any person seeking a RSRO on payments for road transport drivers to forward to the RSRT both the RSRO sought and the assumptions underpinning it. 10

[15] Several persons then forwarded proposed RSROs on payments for road transport drivers to the RSRT and also made applications for a RSRO on payments for road transport drivers. 11

[16] Throughout the remainder of 2014, members of the RSRT, Deputy President Asbury and Mr Squires, conducted conferences on the proposed RSROs. The conferences were open to anyone wishing to participate and provided the opportunity for interested persons to put their views on the proposed RSROs. The aims of the conferences included ascertaining areas of agreement and disagreement and narrowing differences.

[17] The President of the RSRT received an interim report on the conferences in May 2014, with a final report on the conferences being provided to the President in December 2014. The interim and final reports were published on the RSRT website.

[18] Between 2012 and 2014 the RSRT also published on its website schedules documenting remuneration and selected conditions for road transport drivers, as contained in relevant modern awards, enterprise agreements, state awards, contract determinations and state guidelines. The assumptions underlying them were also published, where they were available. In 2015, the RSRT published tables containing aggregate payments information collated from records provided to the RSRT by road transport operators.

[19] In April 2015, the RSRT published on its website an independent research project report by KPMG (KPMG report). KPMG provides professional Audit, Tax and Advisory services. The KPMG report contained a cost model and associated minimum payments for contractor drivers involved in distribution and long distance operations.

[20] A process for persons to question KPMG about the KPMG report and for KPMG to respond to the questions was also facilitated by the RSRT, with the questions and answers being published on the RSRT website.

[21] The RSRT issued a Statement 12 in May 2015 advising that it was considering the making of a draft RSRO covering payments and associated issues for contractor drivers covered by the 2014 RSRO. The Statement invited further written submissions and submissions in reply on the final report of Deputy President Asbury and Mr Squires of December 2014, the KPMG report and any other matters relevant to the matter of payments and associated issues for contractor drivers. The Statement also indicated that the RSRT would conduct hearings as requested or necessary in the week commencing 24 August 2015. Throughout May to early August 2015 the RSRT received numerous written submissions and submissions in reply, which were published on the RSRT website.

[22] The President of the RSRT conducted a proceeding on 6 August 2015 to ascertain the views of interested persons about the abovementioned hearings scheduled for the week commencing 24 August 2015. At the proceeding, no party requested that the hearings proceed. In the result, the hearings were cancelled with the RSRT advising in a Statement 13 that it would consider whether or not to make a draft RSRO covering payments and associated issues for contractor drivers covered by the 2014 RSRO having regard to the material before it.

[23] On 26 August 2015, the RSRT made and published a draft RSRO covering payments and associated issues for contractor drivers covered by the 2014 RSRO. 14

[24] The draft RSRO had clauses covering the following issues:

● Title
● Commencement and expiry
● Definitions and interpretation
● Application
● Promotion of orders
● Savings clause
● Dispute resolution
● Supply chain contracts
● Minimum payments for a distribution operation
● Minimum payments for a long distance operation
● Facilitative provisions
● Unpaid leave.

[25] The draft RSRO also had two schedules, being:

● Schedule A – Minimum payments for a Distribution Operation
● Schedule B – Minimum payments for a Long Distance Operation.

[26] In making and publishing the draft RSRO, the RSRT invited interested persons wanting to make submissions and/or present evidence to the RSRT on the draft RSRO to do so in writing, and also provided the opportunity for written comments and/or evidence in reply. 15 The material received was published on the RSRT website.

[27] In addition, the RSRT conducted hearings from 22 to 25 October 2015 on the draft RSRO.

[28] An opportunity to provide further written material was afforded to interested persons subsequent to the hearing.

[29] More than 100 persons, including individuals, companies and representative bodies, presented submissions, material and comments to the RSRT on the draft RSRO, with many making multiple submissions. A list of those persons who presented submissions, material and comments is at Attachment B.

[30] Against this background, we turn to consider the material and submissions presented to the RSRT on the clauses in the draft RSRO and the other clauses proposed by parties.

Submissions, material and comments on the clauses in the draft RSRO and other clauses

1. Title

[31] The draft RSRO is named the “Contractor Driver Minimum Payments Road Safety Remuneration Order 2016” (2016 RSRO). There was little support for changing this title and there is merit in retaining it. This results in the following “Title” clause:

1. Title

This order is the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016.”

2. Commencement and expiry

[32] The draft RSRO provides for any RSRO to have a commencement date of 1 January 2016 and an expiry date of 31 December 2019.

[33] This commencement and expiry was supported by the Transport Workers’ Union of Australia (TWU), National Independent Trucking Association Inc (NITA) and various contractor drivers.

[34] Some parties, however, sought considerable delay in the commencement of any RSRO, while others sought a date which was beyond the New Year period and sufficient to allow for those affected to make any necessary administrative and transitional arrangements.

[35] There was no general opposition to any RSRO having a life of four years. The RSR Act provides that the expiry date for a RSRO must not be later than four years after its commencement. 16

[36] A commencement and expiry clause is necessary to the operation of a RSRO, but of no effect unless the RSRO has substantive terms. We think there is merit in providing for a delay in the commencement of any RSRO to 4 April 2016 and an expiry date of 3 April 2020. Such a delay allows those affected a period of adjustment between its publication and commencement. With respect to the expiry date, we note that s.32 of the RSR Act provides for the RSRT to vary a RSRO at any time before its expiry date on its own initiative or on application by certain persons and bodies. Further, s.31 of the RSR Act provides that the RSRT must review a RSRO at some time in the period of 12 months ending on its expiry date. In the circumstances, we are not persuaded the expiry date of any RSRO should be earlier.

[37] These considerations result in the following “Commencement and expiry” clause:

2. Commencement and expiry

This order commences on 4 April 2016 and expires on 3 April 2020.”

3. Definitions and interpretation

[38] There is a “Definitions and interpretation” clause in the draft RSRO.

[39] Again, a definitions and interpretations clause is necessary to the operation of any RSRO, but of no effect unless the RSRO has substantive terms.

[40] Some sought changes to the definitions included in the draft RSRO. Where those definitions reflect the definitions used in the RSR Act, we are not persuaded there is merit in altering them. Nor are we persuaded to redefine terms which are common to the draft RSRO and the 2014 RSRO. The basis for doing so was not persuasive. We consider using different definitions is likely to create confusion or uncertainty. Further, we are not persuaded to define words such as “regularly”, “reasonably” and “display”. They are commonly used in legislation or have their ordinary meaning. However, there is merit in deleting definitions that are superfluous.

[41] For reasons that we give later, we have included a definition of “unpaid leave” in the clause, as well as a definition of the terms “GST” and “Fair Work Ombudsman”.

[42] These considerations result in the following “Definitions and interpretation” clause:

3. Definitions and interpretation

In this order, unless the contrary intention appears:
Act means the Road Safety Remuneration Act 2012 (Cth).

Commonwealth authority means:

(a) a body corporate established for a public purpose by or under a law of the Commonwealth; or

(b) a body corporate:

(i) incorporated under a law of the Commonwealth or a State or Territory; and

(ii) in which the Commonwealth has a controlling interest.

consignor or consignee means a person:

(a) who is the consignor or consignee of a thing in respect of which a road transport driver is providing road transport services; and

(b) to whom any of the following apply:

(i) the person is a constitutional corporation, the Commonwealth, a Commonwealth authority, a Territory or a Territory authority; or

(ii) the person is an individual who is resident in, or a body corporate that has its principal place of business in, a Territory; or

(iii) the person is the consignor or consignee for the purposes of a business undertaking of a constitutional corporation; or

(iv) the person is the consignor or consignee for the purposes of the Commonwealth, a Commonwealth authority, a Territory or a Territory authority; or

(v) the person is the consignor or consignee in the course of or in relation to constitutional trade or commerce; or

(vi) the person is a corporation that was the consignor or consignee of a thing for the purposes of the business of that corporation.

constitutional corporation means a corporation to which paragraph 51(xx) of the Constitution applies.

constitutional trade or commerce means trade or commerce:

(a) between Australia and a place outside Australia; or

(b) among the States; or
(c) between a State and a Territory; or

(d) between two Territories; or

(e) within a Territory.

contractor driver means a road transport driver who is an independent contractor.

controlling interest means controlling interest in a corporation.

controlling interest in a corporation means an interest in the corporation that enables the person holding the interest to:

(a) control the composition of the board of directors of the corporation; or

(b) cast or control the casting of more than one half of the maximum number of votes that might be cast at a general meeting of the corporation; or

(c) control more than one half of the issued share capital of the corporation (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).

distribution operation means a road transport service which does not involve a long distance operation.

Fair Work Ombudsman means the Fair Work Ombudsman under the Fair Work Act 2009 (Cth).

gross vehicle mass (GVM) means the maximum permissible mass (whether described as the gross train vehicle mass or otherwise) for the motor vehicle and its load (but excluding any trailer and its load) as stated in a certificate of registration or other certificate that is issued in respect of the motor vehicle by the relevant authority or by the corresponding authority of another State or Territory or that is required by the law to be painted or displayed on the motor vehicle.

GST means the Goods and Services Tax.

hirer means the party to a road transport contract, other than the contractor driver who is a party to the road transport contract.

immediate family of an individual has the same meaning as immediate family has for a national system employee under the Fair Work Act 2009 (Cth).

independent contractor is not confined to an individual.

intermediary means a person who is party to a contract for the carriage of goods, and that contract concerns the transport of a thing in respect of which a road transport driver is providing road transport services, provided:

(a) the person is a constitutional corporation, the Commonwealth, a Commonwealth authority, a Territory or a Territory authority; or

(b) the contract was entered into in a Territory; or

(c) at least one of the parties to the contract is an individual who is resident in, or a body corporate that has its principal place of business in, a Territory; or

(d) the contract is for the purposes of a business undertaking of a constitutional corporation; or

(e) the contract is for the purposes of the Commonwealth, a Commonwealth authority, a Territory or a Territory authority; or

(f) the contract was made in the course of or in relation to constitutional trade or commerce; or

(g) the person is a corporation that has entered into the contract for the purposes of the business of that corporation.

interstate operation means an operation involving a vehicle moving livestock or materials whether in a raw or manufactured state from a principal point of commencement in one State or Territory to a principal point of destination in another State or Territory. Provided that to be an interstate operation the distance involved must exceed 200 kilometres, for any single journey. An area within a radius of 32 kilometres from the GPO of a capital city will be deemed to be the capital city.

livestock means horses, cattle, sheep, pigs, goats or poultry.

long distance operation means any interstate operation, or any return journey where the distance travelled exceeds 500 kilometres and the operation involves a vehicle moving livestock or materials whether in a raw or manufactured state from a principal point of commencement to a principal point of destination. An area within a radius of 32 kilometres from the GPO of a capital city will be deemed to be the capital city.

operator of premises for loading and unloading means a person who is a constitutional corporation that operates premises or part of premises:

(a) that are used by a road transport driver to load or unload a vehicle; and

(b) at which an average of at least 5 vehicles are loaded or unloaded on each active day the premises or part of the premises are used to load or unload vehicles, having regard to each active day in the previous 12 months or, if the corporation first used the premises or part of the premises to load or unload vehicles less than 12 months ago, having regard to each active day in the period since the premises or part of the premises were first used to load or unload vehicles.

participant in the supply chain means a participant in the supply chain in relation to a road transport driver.

participant in the supply chain in relation to a road transport driver means a consignor or consignee, intermediary or operator of premises for loading and unloading.

related individual means a related individual of a corporation.

related individual of a corporation means each of the following individuals:

(a) a director of the corporation;

(b) a member of the immediate family of a director of the corporation;

(c) an individual who, together with members of the individual’s immediate family, has a controlling interest in the corporation;

(d) a member of the immediate family of an individual who, together with members of the individual’s immediate family, has a controlling interest in the corporation.

road transport contract means a contract for services under which a contractor driver is to provide road transport services to the hirer, including a reference to a condition or collateral arrangement that relates to the contract.

road transport driver means:

(a) an individual, other than a related individual of a corporation who drives one or more of the corporation’s vehicles, who engages in the road transport industry by driving a vehicle to transport things by road, provided the individual does so:

(i) as an employee of a constitutional corporation, the Commonwealth, a Commonwealth authority, a Territory or a Territory authority; or

(ii) under a road transport contract the other party to which is a constitutional corporation, the Commonwealth, a Commonwealth authority, a Territory or a Territory authority; or

(iii) under a contract entered into in a Territory; or

(iv) under a contract at least one of the parties to which is an individual who is resident in, or a body corporate that has its principal place of business in, a Territory; or

(v) for the purposes of a business undertaking of a constitutional corporation; or

(vi) for the purposes of the Commonwealth, a Commonwealth authority, a Territory or a Territory authority; or

(vii) in the course of or in relation to constitutional trade or commerce; or

(viii) under a road transport contract the other party to which is a corporation that has entered into the contract for the purposes of the business of that corporation.

(b) a corporation that engages in the road transport industry by transporting things by road using one or more vehicles supplied by the corporation or a related individual, provided:

(i) the vehicle or each vehicle is mainly driven by a related individual; and

(ii) the related individual’s principal occupation is driving the vehicle or vehicles; and

(iii) the corporation is a constitutional corporation.

road transport industry means any of the following:

(a) the road transport and distribution industry within the meaning of the Road Transport and Distribution Award 2010 as in force on 1 July 2012;

(b) long distance operations in the private transport industry within the meaning of the Road Transport (Long Distance Operations) Award 2010 as in force on 1 July 2012;

(c) the cash in transit industry within the meaning of the Transport (Cash in Transit) Award 2010 as in force on 1 July 2012;

(d) the waste management industry within the meaning of the Waste Management Award 2010 as in force on 1 July 2012;

(e) the meaning prescribed by the Road Safety Remuneration Regulation 2012 by reference to a modern award specified in the regulation.

road transport service means a service provided in the road transport industry.

supermarket chain means a business which operates five or more supermarkets.

Territory authority means:

(a) a body corporate established for a public purpose by or under a law of a Territory; or

(b) a body corporate:

(i) incorporated under a law of the Commonwealth or a State or Territory; and

(ii) in which a Territory has a controlling interest.”

unpaid leave means a period in which the contractor driver is both not required to be available for engagement by the hirer and is not engaged by the hirer.”

4. Application

[43] The draft RSRO has the following “Application” clause:

4. Application

4.1 This order applies to a road transport driver employed or engaged in:

(a) the road transport and distribution industry within the meaning of the Road Transport and Distribution Award 2010 as in force on 1 July 2012, in respect of the provision by the road transport driver of a road transport service wholly or substantially in relation to goods, wares, merchandise, material or anything whatsoever destined for sale or hire by a supermarket chain; or

(b) long distance operations in the private transport industry within the meaning of the Road Transport (Long Distance Operations) Award 2010 as in force on 1 July 2012.

4.2 This order imposes requirements on an employer or hirer of a road transport driver to whom this order applies, and on a participant in the supply chain in relation to a road transport driver to whom this order applies.”

[44] This clause is the same as the coverage clause of the 2014 RSRO.

[45] Some parties sought various exclusions from the application clause. The exclusions sought included:

● long distance operations;
● sectors carting bulk or specialised goods;
● non-exclusive hire arrangements, ad hoc transport services and specialised transport services;
● transportation of livestock, grain and other rural commodities;
● sectors not caught by the Transport Industry – General Carriers Contract Determination (NSW) 17 (NSW General Carriers Contract Determination);
● contracts excluded by s.309 of the Industrial Relations Act 1996 (NSW);
● a road transport driver employed or engaged by an employer or hirer that manufactures bread or bakery products;
● road transport drivers in the cash in transit industry, wharf and port sector, waste management industry or oil, fuel and gas sectors, where the RSRT is currently conducting inquiries;
● the car carrying sectors; and
● longer term contracts of engagement.

[46] Some parties sought that the application clause not apply to employee road transport drivers or their employers.

[47] The TWU and Linfox Australia Pty Ltd (Linfox) submitted that the clause should make clear that where a NSW contract determination provides more favourable conditions then the more favourable conditions continue to apply, with Linfox suggesting that any RSRO should provide that an instrument prevails over the RSRO to the extent of any inconsistency.

[48] Some parties sought to expand the scope of subclause 4.1(a) to cover more supermarkets, including affiliates or franchises.

[49] The only changes to the “Application” clause that we are persuaded to make are to exclude employee road transport drivers and their employers and to exclude contractor drivers who are subject to other inquiries currently being conducted by the RSRT. Later we also exclude employee road transport drivers and their employers from the promotion of orders clause.

[50] The supermarkets to whom subclause 4.1 applies were set out in the draft RSRO. It did not extend to cover the range of supermarkets sought by some parties. Where an expansion of the application of a RSRO is sought, the more appropriate course is for the party seeking the expansion to make an application to vary the RSRO and/or for the RSRT to issue a draft RSRO covering the expansion.

[51] The following sections of the RSR Act deal with the interaction between it and other laws:

10 Concurrent operation generally intended

(1) This Act is not intended to exclude or limit the operation of any other law of the Commonwealth or any law of a State or Territory that is capable of operating concurrently with this Act.

(2) In particular, this Act is not intended to exclude or limit the operation of:

(a) the Fair Work Act 2009; or

(b) the Independent Contractors Act 2006 (but see section 14); or

(c) Chapter 6 of the Industrial Relations Act 1996 of New South Wales (and any other provision of that Act to the extent that it relates to, or has effect for the purposes of, a provision of Chapter 6); or

(d) the Owner Drivers and Forestry Contractors Act 2005 of Victoria; or

(e) the Owner-Drivers (Contracts and Disputes) Act 2007 of Western Australia; or

(f) a law of a State or Territory that is specified in regulations made for the purposes of this paragraph, to the extent that the law is so specified.

(3) However, this section is subject to the other provisions of this Subdivision.

11 Interaction of enforceable instruments with State and Territory laws

An enforceable instrument prevails over a law of a State or Territory, to the extent of any inconsistency.

12 Interaction of enforceable instruments with other Commonwealth instruments (employees)

(1) A term of a modern award, an enterprise agreement, an FWC order or a transitional instrument has no effect in relation to a road transport driver to whom an enforceable instrument applies to the extent that the award, agreement, order or instrument is less beneficial to the driver than a term of the enforceable instrument.

(2) In this Act:

enterprise agreement means an enterprise agreement made under the Fair Work Act 2009.

FWC order means an order of the Fair Work Commission made under the Fair Work Act 2009.

transitional instrument means a transitional instrument within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.

13 Interaction of enforceable instruments with road transport contracts (independent contractors)

A contractor driver is entitled to be provided, by the required provider under an enforceable instrument that applies to the driver, with at least the remuneration and related conditions in the enforceable instrument, regardless of the terms of any road transport contract to which the driver is party.

14 Interaction with the Independent Contractors Act 2006

For the purposes of paragraph 15(1)(d) of the Independent Contractors Act 2006, an enforceable instrument that applies to a road transport driver whose services contract is being reviewed under that Act is a matter the Court under that Act might (but is not required to) think relevant.”

[52] Having regard to these statutory provisions, we are not persuaded there is any necessity to include a provision regarding NSW contract determinations or other instruments in any RSRO.

[53] Some sought exclusion on the basis that different methods of payment exist in the areas sought to be excluded. We appreciate this, but submissions, material and comments advanced as to the inability or difficulty for these areas of transitioning to an hours and kilometres method of payment were unconvincing. An hours and kilometres method of payment exists in the NSW General Carriers Contract Determination. Contracts of engagement may include a requirement to record both hours and kilometres.

[54] In addition where, pursuant to the 2014 RSRO, a safe driving plan is required then hours and kilometres should be ascertainable from that safe driving plan or the electronic monitoring recognised in the safe driving plans clause of the 2014 RSRO.

[55] Moreover, the RSR Act provides for the making of collective agreements which may enable another method of payment.

[56] We recognise that the Industrial Relations Act 1996 (NSW) and the NSW General Carriers Contract Determination exclude certain areas. However, the RSRT is governed by a different statutory regime. The exclusions from the NSW legislative provisions do not, in themselves, warrant us adopting similar exclusions.

[57] There were other bases raised for specific exclusions from subclause 4.1. Many of these bases rested on unsubstantiated assertions. For example, very little was put about the incidence and specific requirements of multiple hirers of a contractor driver in respect of a single trip by the contractor driver. We have not found the other bases sufficient to warrant the exclusions sought, at this stage. Nonetheless, the other bases have led us to make some changes to the other clauses in the draft RSRO.

[58] We point out that the RSR Act provides for the variation of a RSRO on application. This is a potential means of exclusion, like that in the NSW General Carriers Contract Determination, for those who are subsequently able to demonstrate their exclusion is merited.

[59] This results in the following “Application” clause:

4. Application

4.1 Subject to subclause 4.3, this order applies to a contractor driver engaged in:

(a) the road transport and distribution industry within the meaning of the Road Transport and Distribution Award 2010 as in force on 1 July 2012, in respect of the provision by the contractor driver of a road transport service wholly or substantially in relation to goods, wares, merchandise, material or anything whatsoever destined for sale or hire by a supermarket chain; or

(b) long distance operations in the private transport industry within the meaning of the Road Transport (Long Distance Operations) Award 2010 as in force on 1 July 2012.

4.2 This order imposes requirements on a hirer of a contractor driver to whom this order applies, and on a participant in the supply chain in relation to a contractor driver to whom this order applies.

4.3 This order does not apply to a contractor driver engaged in:

(a) the cash in transit industry within the meaning of the Transport (Cash in Transit) Award 2010 as in force on 1 July 2012; or

(b) the waste management industry within the meaning of the Waste Management Award 2010 as in force on 1 July 2012;

(c) the sector of the road transport industry which is directly related to wharf and port container work; and

(d) the oil, fuel and gas sectors of the road transport industry.”

5. Promotion of orders

[60] A “Promotion of orders” clause is included in the draft RSRO as follows:

5. Promotion of orders

5.1 An employer or hirer of a road transport driver must display this order, the Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 and any variations to either of them:

(a) at each of the employer’s or hirer’s work sites or depots; and

(b) on each of the employer’s or hirer’s websites.

5.2 An employer or hirer of a road transport driver must take all reasonable steps to advise each road transport driver it employs or engages to provide a road transport service and to whom this order applies that:

(a) this order and the Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 applies to them; and

(b) access to this order, the Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 and variations to either of them are available at each of the employer’s or hirer’s work sites or depots, on each of the employer’s or hirer’s websites or on the Road Safety Remuneration Tribunal’s website: www.rsrt.gov.au.”

[61] Some sought that this clause not apply to employers of road transport drivers and/or that the 2014 RSRO be varied if such a clause is an appropriate obligation for employers.

[62] We have been persuaded to exclude employers from the obligation in clause 5. Any variation to the 2014 RSRO is a matter that can be considered separately to these proceedings

[63] Toll Holdings Limited (Toll) and TNT Australia Pty Ltd (TNT) also sought that the clause detail what “reasonable steps” may include.

[64] They submitted the following be added to clause 5 of the draft RSRO:

5.3 The reasonable steps the hirer may take include the following where practicable by:

(a) providing a copy;

(b) providing an electronic copy;

(c) posting a copy;

(d) leaving copies of this order in a lunch or rest facility or in another location that a contract driver has access to;

(e) publishing the order on each of the hirer’s websites; or

(f) advise the contract driver of the Road Safety Remuneration Tribunal website: www.rsrt.gov.au.”

[65] Others submitted that it may be impractical to display a RSRO at some worksites.

[66] We think there is merit in amending the clause in respect of the worksites or depots at which a RSRO must be displayed, so as to limit the required display of a RSRO to, where practicable, a worksite or depot involved in the provision by the road transport driver of the road transport service.

[67] However, we are not persuaded the addition sought by Toll and TNT should be made. The suggestions about detailing the “reasonable steps” confuse the requirement to display a RSRO in subclause 5.1 with the requirement for advice about the application of and access to a RSRO in subclause 5.2. Nor do we think there is any need to specify the frequency of the advice as suggested by a few parties. We see that as included within the concept of “all reasonable steps”.

[68] The requirement to display “where practicable” and in respect of worksites or depots involved in the provision by the driver of the road transport service, and to take “all reasonable steps” to advise, recognises the varying capacities of the employers and hirers of the road transport drivers.

[69] This results in the following “Promotion of orders” clause:

5. Promotion of orders

5.1 A hirer of a contractor driver must display this order, the Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 and any variations to either of them:

(a) where practicable, at each of the hirer’s work sites or depots involved in the provision by the contractor driver of the road transport service; and

(b) on each of the hirer’s websites.

5.2 A hirer of a contractor driver must take all reasonable steps to advise each contractor driver it engages to provide a road transport service and to whom this order applies that:

(a) this order and the Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 applies to them; and

(b) access to this order, the Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 and variations to either of them are available at each of the hirer’s work sites or depots, on each of the hirer’s websites or on the Road Safety Remuneration Tribunal’s website: www.rsrt.gov.au.”

6. Savings clause

[70] A “Savings clause” is included in the draft RSRO as follows:

6. Savings clause

Nothing in this order requires an employer or hirer of a road transport driver to reduce any remuneration or related conditions that the employer or hirer is providing to the road transport driver pursuant to an agreement between the employer or hirer, on the one part, and the road transport driver, on the other part.”

[71] The Australian Industry Group (Ai Group), National Road Transport Association Limited (NatRoad) and NSW ATA Pty Ltd (Road Freight NSW) submitted the “Savings clause” should be deleted or considered once the content of any RSRO is known. They said the clause is unnecessary given that the draft RSRO only imposes minimum obligations. In addition they said that the retention of the “Savings clause” in a RSRO may create confusion. Instead of including a “Savings clause” in any RSRO, they said the RSRT should at most “issue a RSRO that requires the quantum of remuneration payable to a driver to be at least equal to the amount required to be paid to the driver pursuant to the order.” 18

[72] We have not been persuaded we should delete the “Savings clause” or defer its consideration. Any RSRO will establish minimum obligations and we have earlier set out Subdivision A of Division 3 of Part 1 of the RSR Act which deals with the interaction between the RSR Act and other laws. We think the “Savings clause” clarifies, rather than confuses, the effect of any RSRO. Similar clauses were included in modern awards on their commencement and are included in the NSW General Carriers Contract Determination, without any evident confusion. We deal with alternative payment methods later in this decision.

[73] This results in the following “Savings clause”:

6. Savings clause

Nothing in this order requires a hirer of a contractor driver to reduce any remuneration or related conditions that the hirer is providing to the contractor driver pursuant to an agreement between the hirer, on the one part, and the contractor driver, on the other part.”

7. Dispute resolution

[74] There is a “Dispute resolution” clause in the draft RSRO as follows:

7. Dispute resolution

Part 4 of the Act provides for the Road Safety Remuneration Tribunal, on application, to deal with certain disputes about remuneration or related conditions.”

[75] There was no general opposition to its inclusion in any RSRO and we think there is merit in including the clause in a RSRO.

[76] This results in the following “Dispute resolution” clause:

7. Dispute resolution

Part 4 of the Act provides for the Road Safety Remuneration Tribunal, on application, to deal with certain disputes about remuneration or related conditions.”

8. Supply chain contracts

[77] Clause 8 of the draft RSRO concerns supply chain contracts and is as follows:

8. Supply chain contracts

8.1 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:

(a) are relevantly consistent with the requirements of this order; and

(b) are sufficient for the second party to comply, or be permitted to comply, with the requirements this order imposes on the second party; and

(c) require the second party to comply with the requirements this order imposes on the second party; and

(d) permit the first party to conduct an annual audit of the compliance by the second party with the requirements this order imposes on the second party; and

(e) require the second party to co-operate in the annual audit permitted by subclause 8.1(d) including by maintaining any information, records and documents the first party reasonably requests the second party to maintain for the purpose of conducting the annual audit and complying with all reasonable requests by the first party for the information, records and documents.

8.2 Subject to subclause 8.3, a participant in the supply chain (the first party) in relation to a road transport driver must conduct an annual audit of the compliance by another participant in the supply chain (the second party) with whom it has a contract with the requirements this order imposes on the second party.

8.3 Subclause 8.2 does not apply unless a participant in the supply chain (the first party) in relation to a road transport driver has a contract with another participant in the supply chain (the second party), this order imposes requirements on the second party, and the contract between the first party and the second party is of no fixed duration or the contract or contracts between the first party and the second party are, singly or collectively, for a period of at least 30 days in a year.

8.4 Where a participant in the supply chain (the first party) in relation to a road transport driver becomes aware, or has a reasonable belief, that another participant in the supply chain (the second party) with whom it has a contract is not complying with the requirements this order imposes on the second party, the first party:

(a) must provide the second party with written notice of the non-compliance, the nature of the non-compliance and the steps required to rectify the non-compliance; and

(b) must notify relevant regulatory bodies of the alleged non-compliance by the second party with the requirements of this order; and

(c) may terminate the contract with the second party if the non-compliance is not rectified by the second party within a reasonable period of the second party receiving the written notice specified in subclause 8.4(a).”

[78] When we included this clause in the draft RSRO we said, amongst other things, that:

[36] The proposed RSRO in the aforementioned final report also contained clauses dealing with record keeping, tendering obligations, contractual obligations, auditing and transparency, compliance obligations and recovery of underpayments. Many of the concepts in these clauses have been included in a simplified ‘Supply chain contracts’ clause in the draft … RSRO. The concepts not included are either enforceable in other law or the practical utility of them was not established.” 19

[79] The TWU and some contractor drivers supported the clause, with the TWU also seeking that the clause include the amendments underlined below:

8. Supply chain contracts

8.1 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:

(a) are relevantly consistent with the requirements of this order and other relevant legal requirements; and

(b) are sufficient for the second party to comply, or be permitted to comply, with the requirements this order imposes on the second party and other relevant legal requirements of the second party; and

(c) are sufficient to permit the road transport driver ultimately responsible for undertaking the transport task to be paid in accordance with this order and other relevant legal requirements; and

(d) require the second party to comply with the requirements this order imposes on the second party and other relevant legal requirements of the second party and to ensure that the road transport driver ultimately responsible for undertaking the transport task is paid in accordance with this order and other relevant legal requirements; and

(e) permit the first party to conduct an annual audit of the compliance by the second party with the requirements this order imposes on the second party and other relevant legal requirements of the second party; and

(f) require the second party to co-operate in the annual audit permitted by subclause 8.1(d) including by maintaining any information, records and documents the first party reasonably requests the second party to maintain for the purpose of conducting the annual audit and complying with all reasonable requests by the first party for the information, records and documents, including maintaining records sufficient to identify each hirer, employer and intermediary engaged in that relevant supply chain (whether engaged directly by the second party, or by an intermediary between the second party and the hirer or employer).

8.2 Subject to subclause 8.3, a participant in the supply chain (the first party) in relation to a road transport driver must conduct an annual audit of the compliance by another participant in the supply chain (the second party) with whom it has a contract with the requirements this order imposes on the second party and other relevant legal requirements of the second party and that the road transport driver ultimately responsible for undertaking the transport task is paid in accordance with this order and other relevant legal requirements

8.5 For the purposes of this clause, ‘relevant legal requirements’ includes the Act, the Fair Work Act 2009 (Cth), any workplace health and safety laws, any law made with respect to the regulation of heavy vehicles and any fatigue related law.” 20

[80] Linfox similarly supported expanding the matters dealt with in clause 8.

[81] Concerns expressed by others about the clause, included:

● whether the obligations in the clause applied to “downline” as well “upline” participants in the supply chain;

● its application to existing contracts and the scope of the contracts to which it applies;

● the meaning and scope of terms such as “all reasonable measures”, “sufficient”, “annual audit” and “relevant regulatory bodies”;

● the necessity for subclauses 8.1(d) and (e) having regard to the exclusion in subclause 8.3;

● the practicality and administrative burden of an annual audit and the confidentiality and commercial sensitivity issues associated with an annual audit; and

● the notification to regulatory bodies before there being an opportunity for rectification of the alleged non-compliance and the circumstances for the exercise of the discretion to terminate the contract.

[82] The “Supply chain contracts” clause is intended to support the minimum payments clauses and associated schedules of a RSRO.

[83] We think there is merit in any RSRO having a clause requiring annual audits, albeit one modified from that in the draft RSRO having regard to the concerns raised. We are conscious that many affected by such a clause will not have previously undertaken such audits. Accordingly, at this stage we think there is merit in limiting any audit to compliance with the requirements imposed by the minimum payments and associated clauses of any RSRO and leaving it to the person required to conduct the audit as to whether they conduct a full or sample audit.

[84] Further, we think there is merit in clarifying and simplifying the persons on whom the audit and associated provisions in clause 8 impose requirements. This can be achieved by limiting the obligations in the clause to hirers and certain intermediaries, including only such of those intermediaries who are party to a contract or contracts for the carriage of goods on 270 more days in a financial year. The 270 or more days a year being designed to cover intermediaries who require the transport of a thing in respect of which a road transport driver is providing road transport services on more than five days a week in general.

[85] Requiring a person who is a hirer to advise relevant others about the engagement of a contractor driver in relation to the contract for the carriage of goods and for them to in turn advise others of that advice will facilitate compliance with the audit and associated provisions in the clause. Clarifying the period to be covered by an audit and the timelines for conducting the audit, and the giving of the aforementioned advice and other related actions will also facilitate compliance.

[86] Regulations 7.7 and 7.12 of the Road Safety Remuneration Regulation 2012 (RSR Regulation) require a hirer of a contractor driver to keep certain records if a RSRO imposes requirements on them. The information required to be recorded includes information about the amount the hirer is required to pay the contractor driver under the RSRO and the amount paid or payable by the hirer to the contractor driver, as well as how the amount was calculated. The hirer is also required to make and keep records that show they have complied with the requirements imposed on them by the RSRO.

[87] As a result, a person who is a hirer need not create new records for an audit. In addition such a clause need not require a person who is a hirer to reveal to others the amount the hirer actually paid to a contractor driver above the minimum amount arising from the payments clauses of any RSRO.

[88] We also agree there is merit in clarifying the regulatory body to whom advice about non-compliance must be given and the circumstances in which such advice must be given. We have been persuaded the termination of a contract for non-compliance with a RSRO is better left to other law.

[89] Having regard to the range of issues raised about the aspects of clause 8 in the draft RSRO concerning the content of the contract between the participants in the supply chain, we consider a preferable approach is for any RSRO to impose more of the obligations on the relevant participant in the supply chain directly rather than through a contract and to clarify what the clause requires in respect of such contracts. However, the clause should apply to all such contracts regardless of when made, subject to those party to them taking all reasonable steps to bring them into conformance. This will provide such parties with reasonable time to bring pre-existing contracts into conformance.

[90] This results in the following “Supply chain contracts” clause:

8. Supply chain contracts

8.1 Clause 8 applies in relation to a road transport contract and a contract for the carriage of goods irrespective of when the contract is made, including whether the contract is made before, on or after the day on which this order commences.

8.2 A participant in the supply chain in relation to a road transport driver must take all reasonable steps to ensure that any contract that the participant has with another participant in the supply chain does not contain any provision that is intended to have the effect, or that has the effect, of preventing or impeding compliance by a hirer, who engages a contractor driver, with the requirements imposed by this order.

8.3 Subclauses 8.3 to 8.12 apply to a person who, in a financial year, is both:

(a) a party to a contract for the carriage of goods, and that contract concerns the transport of a thing in respect of which a road transport driver is providing road transport services; and

(b) the hirer to whom a contractor driver is to provide road transport services under a road transport contract in respect of the thing referred to in subclause 8.3(a).

8.4 Subclauses 8.3 to 8.12 also apply to a person in subclause 8.5(a) or (b).

8.5 The hirer referred to in subclause 8.3 must permit the following persons to conduct an audit of the hirer’s compliance, in relation to the contractor driver, in the relevant financial year with the requirements imposed on the hirer by Part 4 of this order:

(a) a person who is the other party to the contract for the carriage of goods referred to in subclause 8.3(a);

(b) a person, other than the hirer, who in the relevant financial year is a party to a contract for the carriage of goods with the person referred to in subclause 8.5(a), and that contract concerns the transport of a thing:

(i) in respect of which a road transport driver is providing road transport services; and

(ii) the road transport services in respect of which are provided by the contractor driver under the road transport contract referred to in subclause 8.3(b).

8.6 Subclause 8.5 only requires the hirer to permit a person referred to in subclause 8.5(a) or (b) to conduct an audit in relation to a financial year if the person is, in that financial year, a party to a contract for the carriage of goods that singly provides, or to two or more contracts for the carriage of goods that collectively provide, for the carriage of goods on 270 or more days in that financial year.

8.7 A person permitted to conduct an audit under subclause 8.5:

(a) must conduct it by 31 December immediately following the end of the relevant financial year; and

(b) may conduct it by reviewing all, or a reasonably representative sample, of the records referred to in subclause 8.9(b).

8.8 The hirer must take all reasonable steps to facilitate the conduct of the audit referred to in subclause 8.5.

8.9 Without limiting subclause 8.8, all reasonable steps include:

(a) advising the person referred to in subclause 8.5(a) by 31 August immediately following the end of the relevant financial year that in that financial year the hirer was a party to the road transport contract referred to in subclause 8.3(b); and

(b) complying with any reasonable request by a person referred to in subclause 8.5(a) or (b) for access to records that show the hirer has complied, in relation to the contractor driver, in that financial year with the requirements imposed by Part 4 of this order.

8.10 The person referred to in subclause 8.5(a) must take all reasonable steps to notify the person referred to in subclause 8.5(b) by 30 September immediately following the end of the relevant financial year of any advice received under subclause 8.9(a).

8.11 If the person referred to in subclause 8.5(a) or (b) forms a reasonable belief, arising out of the audit, that the hirer has not complied, in relation to the contractor driver, in the relevant financial year with the requirements imposed by Part 4 of this order:

(a) the person must give written notice of that belief to the hirer; and

(b) the written notice referred to in subclause 8.11(a) must:

(i) set out the nature of the non-compliance and the action required to rectify it; and

(ii) require the hirer to rectify the non-compliance within 28 days after the giving of the notice.

8.12 If the person who gives a written notice under subclause 8.11(a) is not reasonably satisfied that the non-compliance has been rectified by the hirer as required by the notice, the person must immediately advise the Fair Work Ombudsman of:

(a) the person’s reasonable belief that the hirer has not complied, in relation to the contractor driver, in the relevant financial year with the requirements imposed by Part 4 of this order; and

(b) the nature of the non-compliance.”

9. Minimum payments for a distribution operation

10. Minimum payments for a long distance operation

[91] The “Minimum payments” clauses in the draft RSRO are as follows:

9. Minimum payments for a distribution operation

A hirer who engages a contractor driver to provide a road transport service which does not involve a long distance operation must pay the contractor driver:

9.1 at no less than the relevant rate per hour in Schedule A for each hour, or part thereof, that the contractor driver necessarily spends in providing the road transport service; and

9.2 at no less than the relevant rate per kilometre in Schedule A for each kilometre that the contractor driver necessarily travels in providing the road transport service; and

9.3 if 50% or more of the kilometres the contractor driver necessarily travels in providing the road transport service occurs in the Northern Territory, Tasmania or regional Western Australia, at no less than the relevant supplementary rate per kilometre in Schedule A for each kilometre that the contractor driver necessarily travels in providing the road transport service.

10. Minimum payments for a long distance operation

A hirer who engages a contractor driver to provide a road transport service which does involve a long distance operation must pay the contractor driver:

10.1 at no less than the relevant rate per hour in Schedule B for each hour, or part thereof, that the contractor driver necessarily spends in providing the road transport service; and

10.2 at no less than the relevant rate per kilometre in Schedule B for each kilometre that the contractor driver necessarily travels in providing the road transport service; and

10.3 if 50% or more of the distance the contractor driver necessarily travels in providing the road transport service occurs in the Northern Territory, Tasmania or regional Western Australia, at no less than the relevant supplementary rate per kilometre in Schedule B for each kilometre that the contractor driver necessarily travels in providing the road transport service.”

[92] The Ai Group, NatRoad and Road Freight NSW, supported by Toll, proposed the following addition to clause 9:

9.4 The obligation to provide a payment under this clause will only arise in relation to the performance of a transport service wholly or substantially in relation to goods, wares, merchandise, material or anything whatsoever destined for sale or hire by a supermarket chain.” 21

[93] The Retail Council Limited (Retail Council) supported by others proposed an amendment to subclauses 9.1 and 10.1 to specify that the relevant hourly rate is payable “for each hour (and pro-rata for any part of an hour)” that the contractor driver necessarily travels in providing the road transport service. They submitted that such an amendment would clarify that part hours do not attract payment for a full hour.

[94] We think the application clause that we have earlier set out, in conjunction with subclauses 9.1 and 10.1, make clear the types of hirers on whom the minimum payments clauses impose obligations and the circumstances in which the obligations apply. We are not persuaded the proposed subclause 9.4 is necessary.

[95] The proposed amendment of the Retail Council has merit as it clarifies the intent of subclauses 9.1 and 10.1.

[96] We later conclude that we should not make the supplementary rates referred to in subclauses 9.3 and 10.3. As a result, subclauses 9.3 and 10.3 should be deleted.

[97] The Ai Group, NatRoad and Road Freight NSW submitted the terms “necessarily spends” and “necessarily travels” in clauses 9 and 10 are ambiguous and expansionary. We are not persuaded the terms should be altered. They are intended to be objective terms which relieve a hirer from being obliged to pay for hours or travel which are not associated with the provision of the road transport service by the contractor driver.

[98] For reasons we give later, we think there is merit in enabling a hirer who engages a contractor driver for a distribution operation to pay the contractor driver at the minimum rates for a long distance operation for each day that the road transport service provided by the contractor driver for the hirer necessarily involves 400 or more kilometres travel.

[99] This results in the following minimum payments clauses:

9. Minimum payments for a distribution operation

9.1 A hirer who engages a contractor driver to provide a road transport service which does not involve a long distance operation must pay the contractor driver:

(a) at no less than the relevant rate per hour in Schedule A for each hour, (and pro-rata for any part of an hour), that the contractor driver necessarily spends in providing the road transport service; and

(b) at no less than the relevant rate per kilometre in Schedule A for each kilometre that the contractor driver necessarily travels in providing the road transport service.

9.2 A hirer who engages a contractor to provide a road transport service which does not involve a long distance operation may pay the contractor driver under clause 10, instead of clause 9, for each day the contractor driver necessarily travels 400 or more kilometres in providing the road transport service.

10. Minimum payments for a long distance operation

10.1 A hirer who engages a contractor driver to provide a road transport service which does involve a long distance operation must pay the contractor driver:

(a) at no less than the relevant rate per hour in Schedule B for each hour, (and pro-rata for any part of an hour), that the contractor driver necessarily spends in providing the road transport service; and

(b) at no less than the relevant rate per kilometre in Schedule B for each kilometre that the contractor driver necessarily travels in providing the road transport service.”

11. Facilitative provisions

[100] Clause 11 of the draft RSRO concerns facilitative provisions and is as follows:

11. Facilitative provisions

11.1 For the purposes of subclauses 9.1 and 10.1, each hour, or part thereof, that the contractor driver necessarily spends in providing the road transport service includes, but is not limited to:

(a) each hour, or part thereof, during which the contractor driver is required by the hirer to be at the disposal and/or direction of the hirer; and

(b) each hour, or part thereof, that the contractor driver spends in taking a fatigue or rest break required by law; and

(c) each hour, or part thereof, that the contractor driver is, or is assisting or supervising another person who is:

(i) driving a vehicle used in the provision of the road transport service; and/or

(ii) queuing and/or waiting, whilst in control of the vehicle used in the provision of the road transport service; and/or

(iii) loading things onto or unloading things from the vehicle and/or a trailer used in the provision of the road transport service, including tarping, installing or removing gates and the operation of on-board cranes, or waiting for someone else to do so; and/or

(iv) cleaning, inspecting, servicing or repairing a vehicle and/or a trailer supplied by the hirer that is used in the provision of the road transport service; and/or

(v) inspecting or attending to a load on the vehicle and/or a trailer used in the provision of the road transport service; and/or

(vi) refuelling the vehicle used in the provision of the road transport service; and/or

(vii) recording information or completing a document as required by law or otherwise in relation to the vehicle and/or a trailer used in the provision of the road transport service; and/or

(viii) waiting in a location because of a natural disaster (eg flood or bushfire) or other emergency.

11.2 For the purposes of subclauses 9.1 and 10.1, each hour, or part thereof, that the contractor driver necessarily spends in providing the road transport service does not include any hour, or part thereof, which is lost because of a breakdown in a vehicle and/or trailer supplied by the contractor driver or an accident involving the contractor driver, or any hour, or part thereof, taken by the contractor driver for a meal break.

11.3 For the purposes of subclauses 9.2, 9.3, 10.2 and 10.3, each kilometre that the contractor driver necessarily travels in providing the road transport service is counted:

(a) from the work site or depot where the contractor driver is principally engaged by the hirer; or

(b) where the contractor driver is not principally engaged at a work site or depot, from a location specified by the hirer which is reasonable taking into account the road transport service provided by the contractor driver; and

(c) to the location at which the road transport service provided by the contractor driver concludes.”

[101] The TWU broadly supported the inclusion of the facilitative provisions in the draft RSRO. The TWU further submitted that industry practices, such as unpaid queuing time, are a major concern for road transport drivers and that the purpose of the facilitative provisions is to ensure that participants at the top of the supply chain are required to account for their own operational efficiencies in their dealings with contractor drivers. They said this is a circumstance that, at present, is not sufficiently dealt with in contractual dealings between the parties. The TWU submitted that payment for all time spent performing the road transport service is essential.

[102] With respect to subclause 11.1(b) of the draft RSRO, the TWU submitted that it is appropriate that time necessarily spent by a contractor driver in providing a road transport service is taken to include time spent in taking mandatory fatigue or rest breaks.

[103] There was considerable opposition from hirers, consignors and their peak representative bodies to subclause 11.1(b) of the draft RSRO regarding payments for fatigue and rest breaks required by law. These parties pointed out that:

● such breaks are not paid time under the Road Transport and Distribution Award 2010, the Road Transport (Long Distance Operations) Award 2010 or the NSW General Carriers Contract Determination;

● payment for such breaks is problematic where there is another hirer in a day, given the different fatigue management provisions under other law and where there are two-up drivers; and

● such breaks cover sleeping or personal recreation breaks as well as other breaks.

[104] We are conscious that the Heavy Vehicle (Fatigue Management) National Regulation requires road transport drivers to take a number of breaks for rest time, some of which are of at least 15 continuous minutes duration and others are for a longer period such as at least seven continuous hours stationary rest time in a 24 hour period.

[105] It is not uncommon in modern awards for employees to be paid for “beverage” breaks of 10 to 15 minutes and for shift workers to be paid for 30 minute “meal” breaks. While payment for such breaks is not a feature of the modern awards in the road transport industry, it is unclear whether the rates of payment provided in those modern awards are higher than they otherwise would be because such breaks are not paid. The hourly and kilometre rates we later set out for contractor drivers do not include an amount for such breaks. We consider it more appropriate that the hourly rate that we later set out be paid for such breaks, as part of time the contractor driver necessarily spends in providing the road transport service.

[106] Balancing the considerations raised by those who oppose subclause 11.1(b) of the draft RSRO against the cost of mandatory rest time falling entirely on the contractor driver and the benefits for the community of such rest time, we consider each mandatory rest time of 30 or less continuous minutes which is required by other law to be taken by a contractor driver should be paid for by their hirer at the time. This is unless another road transport driver is driving the vehicle used in the provision of the road transport service while the contractor driver is taking such rest time. The reference to “meal breaks” in subclause 11.2 of the draft RSRO should be deleted. Otherwise it may be thought there is no obligation to pay a contractor driver for a rest time of 30 or less continuous minutes required by other law when the contractor driver consumes a meal during that rest time.

[107] The submissions, material and comments before us indicate it is not uncommon for hirers to pay contractor drivers for at least some of the time described in subclause 11.1(c).

[108] Some sought clarification that subclause 11.1(c)(iv) in the draft RSRO concerns a vehicle supplied by the hirer. There is merit in that clarification.

[109] The Ai Group, NatRoad, Road Freight NSW, Linfox, TNT and some others also sought to limit the cleaning, inspecting, servicing and repairing referred to in subclause 11.1(c)(iv) of the draft RSRO to that undertaken at the hirer’s direction or pursuant to a contract. We think there is merit in limiting the scope of subclause 11.1(c)(iv) to that which is reasonably required in order to provide the road transport service.

[110] In respect of subclause 11.1(c)(vi) of the draft RSRO, Toll and some others submitted that payment for refuelling should only occur where the contractor driver commences the road transport service with a full tank of fuel and in providing the road transport it is necessary to refuel. We think there is merit in this notion and, as a result, limiting the refuelling to circumstances where the provision of the road transport service requires more fuel than that which the fuel tank of the vehicle can hold. This will limit the hirer’s obligation in respect of refuelling more closely to that associated with the road transport service the contractor driver is providing to the hirer.

[111] There was some view that subclause 11.1(c)(vii) of the draft RSRO should be clarified to limit it to information and documents directly associated with the provision of the road transport service, so that it did not extend to matters such as the completion of business activity statements. We think this is most appropriately achieved by limiting the clause to recording information or completing documents as required by the hirer.

[112] Toll sought to exclude subclause 11.1(c)(viii) concerning waiting because of a natural disaster or other emergency, as it does not currently pay its contractor drivers for such waiting. Linfox, the Ai Group, NatRoad, Road Freight NSW, Toll in the alternative and some others sought to limit subclause 11.1(c)(viii) to no more than eight hours in any period of 24 hours and to require the contractor driver to have advised the hirer and taken measures to minimise the waiting. Toll in the alternative also sought to limit the subclause to three days having regard to one of its enterprise agreements.

[113] We think an appropriate balance between the hirer and contractor driver in respect of such waiting is to limit the number of hours in any 24 to eight and to require the contractor driver to advise the hirer of the waiting and to take measures to minimise the waiting.

[114] Linfox also sought that subclause 11.3(c) be amended to refer to the locations specified by the hirer. We think that is unnecessary as the concluding location should be part of the road transport service the contractor driver is providing for the hirer.

[115] Some others referred to the difficulties with accurately measuring the time spent on the matters referred to in clause 11. We are not persuaded the time spent cannot be measured or ascertained. Later we consider providing for a delay in the operation of any RSRO to enable those affected to make the changes necessary for them to comply with its terms.

[116] Some contractor drivers and those representing them also sought payment for road tolls and loading fees. We have not included them at this stage. This is not to say that they should or should not be paid. However, they were not matters covered by the draft RSRO.

[117] This results in the following “Facilitative provisions” clause:

11. Facilitative provisions

11.1 For the purposes of clauses 9 and 10, each hour, or part thereof, that the contractor driver necessarily spends in providing the road transport service includes, but is not limited to:

(a) each hour, or part thereof, during which the contractor driver is required by the hirer to be at the disposal and/or direction of the hirer; and

(b) each period of rest time of 30 or less continuous minutes that the contractor driver is required by law to rest, unless another road transport driver is driving the vehicle used in the provision of the road transport service while the contractor driver is taking such rest time; and

(c) each hour, or part thereof, that the contractor driver is, or is assisting or supervising another person who is:

(i) driving a vehicle used in the provision of the road transport service; and/or

(ii) queuing and/or waiting, whilst in control of the vehicle used in the provision of the road transport service; and/or

(iii) loading things onto or unloading things from the vehicle and/or a trailer used in the provision of the road transport service, including tarping, installing or removing gates and the operation of on-board cranes, or waiting for someone else to do so; and/or

(iv) cleaning, inspecting, servicing or repairing a vehicle supplied by the hirer and/or a trailer supplied by the hirer that is used in the provision of the road transport service, provided the cleaning, inspecting, servicing or repairing is reasonably required in order to provide the road transport service; and/or

(v) inspecting or attending to a load on the vehicle and/or a trailer used in the provision of the road transport service; and/or

(vi) refuelling the vehicle used in the provision of the road transport service, where the provision of the road transport service requires more fuel than the fuel tank of the vehicle can hold; and/or

(vii) recording information or completing a document as required by the hirer in relation to the vehicle and/or a trailer used in the provision of the road transport service; and/or

(viii) waiting in a location because of a natural disaster (eg flood or bushfire) or other emergency, provided that only up to a maximum of eight hours of such waiting in any period of 24 hours shall be counted and provided the contractor driver advised the hirer as soon as possible of the waiting and took all reasonable measures to minimise the waiting.

11.2 For the purposes of clauses 9 and 10, each hour, or part thereof, that the contractor driver necessarily spends in providing the road transport service does not include any hour, or part thereof, which is lost because of a breakdown in a vehicle and/or trailer supplied by the contractor driver or an accident involving the contractor driver.

11.3 For the purposes of clauses 9 and 10, each kilometre that the contractor driver necessarily travels in providing the road transport service is counted:

(a) from the work site or depot where the contractor driver is principally engaged by the hirer; or

(b) where the contractor driver is not principally engaged at a work site or depot, from a location specified by the hirer which is reasonable taking into account the road transport service provided by the contractor driver; and

(c) to the location at which the road transport service provided by the contractor driver concludes.”

12. Unpaid leave

[118] Clause 12 of the draft RSRO relates to unpaid leave for contractor drivers. Clause 12 of the draft RSRO is as follows:

12. Unpaid leave

12.1 Clause 12 applies where a hirer regularly engages a contractor driver to provide a road transport service in the 12 months which precede the date of an anniversary of the date of the ‘first engagement’ by the hirer of the contractor driver to provide a road transport service.

12.2 A hirer must permit a contractor driver to take up to four weeks’ unpaid leave during the 12 months which follows the date of each anniversary of the date of the ‘first engagement’ by the hirer of the contractor driver to provide a road transport service.

12.3 Where there is a break of more than six months between the hirer engaging the contractor driver to provide a road transport service, the date of the ‘last engagement’ by the hirer of the contractor driver to provide a road transport service will be the date of the ‘first engagement’.

12.4 The hirer must not unreasonably refuse to agree to the dates the contractor driver requests of the hirer to take the unpaid leave.”

[119] Some hirers, consignors and their peak representative organisations suggested the clause only apply where the contractor driver provides a replacement driver for any period of unpaid leave. They pointed to the impact on a hirer of having to make alternative arrangements when a contractor driver is given such leave and of some hirers already allowing such leave when the contractor driver provides a replacement contractor driver.

[120] The Ai Group, NatRoad and Road Freight NSW proposed the following clause be added to clause 12:

12.5 This clause will not require a hirer to permit a contractor driver to take a period of unpaid leave if:

(a) the hirer permits the road transport driver to utilise a replacement driver to perform the road transport services so as to enable the individual that mainly drives the vehicle or vehicles in the performance of the service to take a period of leave calculated in accordance with this clause, and

(b) such an agreement has been agreed to by the contractor driver.” 22

[121] However, contractor drivers submitted that it can be difficult to find a replacement driver and some contractor drivers do not want a replacement driver in their vehicle during any unpaid leave.

[122] We have not been persuaded there is merit in amending the clause as sought in respect of replacement drivers.

[123] It was not generally suggested the type of leave afforded by the clause is undesirable. Indeed some hirers already permit their contractor drivers this type of leave. Amending the clause as sought in respect of replacement drivers, may effectively deprive some contractor drivers of the benefit of the type of leave provided by the clause. In these circumstances, we do not think the impact on hirers of the clause warrants the amendments sought.

[124] The Ai Group, NatRoad and Road Freight NSW also considered the term “unpaid leave” to be ambiguous in the context of contractor drivers. We are aware that provision for “annual leave” is contained in the NSW General Carriers Contract Determination. Nonetheless, we think there is merit in clarifying the meaning of the term by defining it to mean “a period in which the contractor driver is both not required to be available for engagement by the hirer and is not engaged by the hirer.” We included this definition in the “Definitions and interpretation” clause earlier.

[125] They also queried the application of the clause in respect of a contractor driver who is a corporation. In such a situation, the clause applies to the corporation.

[126] The Retail Council considered that, as the word “regularly” is not defined, the clause may cover “untied” as well as “tied” contractor drivers. Our intention was not to limit the clause to “tied” contractor drivers.

[127] Toll considered subclause 12.3 of the draft RSRO to be ambiguous where there is a break of more than six months’ engagement. There is merit in this submission. It can be resolved by deleting the subclause. Relating the “date of an anniversary” to the “date of the first engagement”, even where there is a break in engagement, is simpler. There is no unpaid leave obligation for a hirer unless they have regularly engaged the contractor driver during the 12 months preceding the date of an anniversary of the date of the first engagement.

[128] This results in the following “Unpaid leave” clause:

12. Unpaid leave

12.1 Clause 12 applies where a hirer regularly engages a contractor driver to provide a road transport service during the 12 months which precede the date of an anniversary of the date of the first engagement by the hirer of the contractor driver to provide a road transport service.

12.2 A hirer must permit a contractor driver to take unpaid leave of up to four weeks during the 12 months which follow the date of each anniversary of the date of the first engagement by the hirer of the contractor driver to provide a road transport service.

12.3 The hirer must not unreasonably refuse to agree to the dates the contractor driver requests of the hirer to take the period of unpaid leave.”

Schedule A – Minimum payments for a Distribution Operation

Schedule B – Minimum payments for a Long Distance Operation

[129] Schedules A and B of the draft RSRO sets out the matters covered by the schedules as follows:

A.1 Application of Schedule A

This Schedule A sets out the relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre that a hirer must pay a contractor driver for the purposes of clause 9.

A.2 Relevant rates from 1 January 2016, 1 January 2017, 1 January 2018 and 1 January 2019.

A.2.1 The relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre for the purposes of clause 9 are set out in the tables in clauses A.4 and A.5 of this Schedule A.

A.2.2 From 1 January 2017, the relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre for the purposes of clause 9 are those in clause A.2.1 increased by 3.2%.

A.2.3 From 1 January 2018, the relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre for the purposes of clause 9 are those in clause A.2.2 increased by 3.2%.

A.2.4 From 1 January 2019, the relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre for the purposes of clause 9 are those in clause A.2.3 increased by 3.2%.

A.3 Determining the relevant rates

A.3.1 Relevant rate per hour and relevant rate per kilometre

A.3.1.1 Where the contractor driver supplies the vehicle and there is no trailer or the hirer or the driver supplies the trailer(s) used in the provision of the road transport service, the relevant rate per hour and relevant rate per kilometre is in the tables in subclauses A.4.1 to A.4.10 of this Schedule A and is that which applies to:

(a) the Transport Worker Grade of the driver providing the road transport service; and

(b) whether a trailer is used in the provision of the road transport service and, if so, whether the hirer or the driver supplies the trailer(s) used in the provision of the road transport service; and

(c) the type of trailer(s), if any, used in the provision of the road transport service; and

(d) the class of the vehicle the driver supplies and which is used in the provision of the road transport service.

A.3.1.2 Where the hirer supplies the vehicle and there is no trailer or the hirer supplies the trailer(s) used in the provision of the road transport service, the relevant rate per hour and relevant rate per kilometre is in the table in subclause A.4.11 of this Schedule A and is that which applies to the Transport Worker Grade of the driver providing the road transport service.

A.3.2 Relevant supplementary rate per kilometre

A.3.2.1 Where the contractor driver supplies the vehicle and there is no trailer or the hirer or the driver supplies the trailer(s) used in the provision of the road transport service, the relevant supplementary rate per kilometre is in the tables in clause A.5 of this Schedule A and is that which applies to:

(a) the location in which 50% or more of the distance the contractor driver necessarily travels in providing the road transport service occurs; and

(b) whether a trailer is used in the provision of the road transport service and, if so, whether the hirer or the driver supplies the trailer(s) used in the provision of the road transport service; and

(c) the type of trailer(s), if any, used in the provision of the road transport service; and

(d) the class of the vehicle the driver supplies and which is used in the provision of the road transport service.

A.3.3 Transport Worker Grade

A.3.3.1 The Transport Worker Grade of the contractor driver providing the road transport service is the Grade in the table below which corresponds with the Description of the work or driving undertaken, in whole or in part, in providing the road transport service:

Transport Worker Grade and Description of the work or driving

Grade

Description of the work or driving

1

General hand, greaser and cleaner, motor driver’s assistance, loader courier.

2

Driving a rigid vehicle (including a motor cycle) not exceeding 4.5 tonnes gross vehicle mass (GVM)

3

Driving a two-axle rigid vehicle or any other rigid vehicle exceeding 4.5 tonnes, but not exceeding 13.9 tonnes gross vehicle mass (GVM)

4

Driving a three-axle rigid vehicle exceeding 16.9 tonnes gross vehicle mass (GVM)

5

Driving a rigid vehicle with four or more axles and a GVM exceeding 13.9 tonnes, or driving a rigid vehicle and heavy trailer combination with three axles and a GCM of 22.4 tonnes or less, or driving an articulated vehicle with three axles and a GCM of 22.4 tonnes or less

6

Driving a rigid vehicle and a heavy trailer combination with more than three axles and a GCM greater than 22.4 tonnes, or driving an articulated vehicle with more than three axles and a GCM greater than 22.4 tonnes

7

Driving a double articulated vehicle up to and including 53.4 tonnes GCM, including B-Doubles

8

Driving a rigid vehicle and trailer(s) or double articulated vehicle exceeding 53.4 tonnes GCM, including B-Doubles

9

Driving a rigid vehicle with trailer combinations or articulated vehicle with trailer combinations exceeding 94 tonnes GCM

10

Driving a multi-axle platform trailing equipment with a carrying capacity in excess of 70 tonnes

A.3.4 Type of trailer

A.3.4.1 The Type of trailer used in the road transport service provided by the contractor driver is the Type in the tables below which corresponds with the Description of the trailer that the contractor driver uses in providing the road transport service:

Types of trailer and Description of the trailer

Single trailer types

Type

Description of the trailer

T1

Converter dolly

T2

Pig trailer

T3

Dog trailer

T4

Low loader

T5

Semi trailer

T6

B-double lead trailer

T7

Refrigerated trailer

Multiple trailer types

Type

Description of the trailer

Trailer Combination

TC1

B-Double

T6 + T5

TC2

A-Double

T5 + T1 + T5

TC3

B Triple

T6 + T5 + T5

TC4

A B Combination

T5 + T1 + T6 + T5

TC5

A Triple

T5 + T1 + T5 + T1 + T5

TC6

Double B-Double

T6 + T5 + T1 + T6 + T5

A.3.5 Class of vehicle

A.3.5.1 The Class of vehicle used in the road transport service provided by the contractor driver is the Class in the table below which corresponds with the Description of the vehicle that the contractor driver uses in providing the road transport service:

Class of vehicle and Description of vehicle

Class

Description of the vehicle

LCV

Rigid vehicle up to and including 3.5 tonnes gross vehicle mass (GVM)

C1

Rigid vehicle exceeding 3.5 tonnes, but not exceeding 4.5 tonnes gross vehicle mass (GVM)

C2

Rigid vehicle exceeding 4.5 tonnes, but not exceeding 9.0 tonnes gross vehicle mass (GVM)

C3

Rigid vehicle exceeding 9.0 tonnes, but not exceeding 13.9 tonnes gross vehicle mass (GVM)

C4

Rigid vehicle exceeding 13.9 tonnes, but not exceeding 16.0 tonnes gross vehicle mass (GVM)

C5

Rigid vehicle exceeding 16.0 tonnes, but not exceeding 20.0 tonnes gross vehicle mass (GVM)

C6

Rigid vehicle exceeding 20.0 tonnes gross vehicle mass (GVM)

C7

Prime mover with 2 axles (‘single axle prime mover’)

C8

Prime mover with 3 axles (‘bogie axle prime mover’)

C9

Prime mover with 4 axles or more

A.4Tables of relevant hourly and kilometre rates for a distribution operation

B.1 Application of Schedule B

This Schedule B sets out the relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre that a hirer must pay a contractor driver for the purposes of clause 10.

B.2 Relevant rates from 1 January 2016, 1 January 2017, 1 January 2018 and 1 January 2019.
B.2.1 The relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre for the purposes of clause 10 are set out in the tables in clauses B.4 and B.5 of this Schedule B.
B.2.2 From 1 January 2017, the relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre for the purposes of clause 10 are those in clause B.2.1 increased by 3.2%.
B.2.3 From 1 January 2018, the relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre for the purposes of clause 10 are those in clause B.2.2 increased by 3.2%.
B.2.4 From 1 January 2019, the relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre for the purposes of clause 10 are those in clause B.2.3 increased by 3.2%.
B.3 Determining the relevant rates
B.3.1 Relevant rate per hour and relevant rate per kilometre
B.3.1.1 Where the contractor driver supplies the vehicle and there is no trailer or the hirer or the driver supplies the trailer(s) used in the provision of the road transport service, the relevant rate per hour and relevant rate per kilometre is in the tables in subclauses B.4.1 to B.4.8 of this Schedule B and is that which applies to:

(a) the Transport Worker Grade of the driver providing the road transport service; and
(b) whether a trailer is used in the provision of the road transport service and, if so, whether the hirer or the driver supplies the trailer(s) used in the provision of the road transport service; and
(c) the type of trailer(s), if any, used in the provision of the road transport service; and
(d) the class of the vehicle the driver supplies and which is used in the provision of the road transport service.

B.3.1.2 Where the hirer supplies the vehicle and there is no trailer or the hirer supplies the trailer(s) used in the provision of the road transport service, the relevant rate per hour and relevant rate per kilometre is in the table in subclause B.4.9 of this Schedule B and is that which applies to the Transport Worker Grade of the driver providing the road transport service.
B.3.2 Relevant supplementary rate per kilometre
B.3.2.1 Where the contractor driver supplies the vehicle and there is no trailer or the hirer or the driver supplies the trailer(s) used in the provision of the road transport service, the relevant supplementary rate per kilometre is in the tables in clause B.5 of this Schedule B and is that which applies to:

(a) the location in which 50% or more of the distance the contractor driver necessarily travels in providing the road transport service occurs; and
(b) whether a trailer is used in the provision of the road transport service and, if so, whether the hirer or the driver supplies the trailer(s) used in the provision of the road transport service; and
(c) the type of trailer(s), if any, used in the provision of the road transport service; and
(d) the class of the vehicle the driver supplies and which is used in the provision of the road transport service.

B.3.3 Transport Worker Grade

B.3.3.1 The Transport Worker Grade of the contractor driver providing the road transport service is the Grade in the table below which corresponds with the Description of the work or driving undertaken, in whole or in part, in providing the road transport service:

Transport Worker Grade and Description of the work or driving

Grade

Description of the work or driving

1

Driving a two axle rigid vehicle up to 13.9 tonnes GVM. Capacity up to eight tonnes

2

Driving a three axle rigid vehicle over 13.9 tonnes GVM. Capacity over eight and up to 12 tonnes

3

Driving a four axle rigid vehicle over 13.9 tonnes GVM, or driver of a rigid vehicle and heavy trailer combination with GCM of 22.4 tonnes or less, or driver of articulated vehicle with GCM of 22.4 tonnes or less

4

Driving a rigid vehicle and heavy trailer combination with GCM over 22.4 tonnes but not more than 42.5 tonnes, or driver of articulated vehicle with GCM over 22.4 tonnes

5

Driving a rigid vehicle and heavy trailer combination with GCM over 42.5 tonnes but not more than 53.4 tonnes, or driving a double articulated vehicle with GCM 53.4 tonnes or less (includes B-doubles)

6

Driving a rigid vehicle and trailer(s), or double articulated vehicle with GCM over 53.4 tonnes (includes B-doubles)

7

Driving a road train or triple articulated vehicle exceeding 94 tonnes GCM

8

Driving a vehicle with multi-axle trailing equipment

B.3.4 Type of trailer

B.3.4.1 The Type of trailer used in the road transport service provided by the contractor driver is the Type in the tables below which corresponds with the Description of the trailer that the contractor driver uses in providing the road transport service:

Types of trailer and Description of the trailer

Single trailer types

Type

Description of the trailer

T1

Converter dolly

T2

Pig trailer

T3

Dog trailer

T4

Low loader

T5

Semi trailer

T6

B-double lead trailer

T7

Refrigerated trailer

Multiple trailer types

Type

Description of the trailer

Trailer Combination

TC1

B-Double

T6 + T5

TC2

A-Double

T5 + T1 + T5

TC3

B Triple

T6 + T5 + T5

TC4

A B Combination

T5 + T1 + T6 + T5

TC5

A Triple

T5 + T1 + T5 + T1 + T5

TC6

Double B-Double

T6 + T5 + T1 + T6 + T5

B.3.5 Class of vehicle

B.3.5.1 The Class of vehicle used in the road transport service provided by the contractor driver is the Class in the table below which corresponds with the Description of the vehicle that the contractor driver uses in providing the road transport service:

Class of vehicle and Description of vehicle

Class

Description of the vehicle

LCV

Rigid vehicle up to and including 3.5 tonnes gross vehicle mass (GVM)

C1

Rigid vehicle exceeding 3.5 tonnes, but not exceeding 4.5 tonnes gross vehicle mass (GVM)

C2

Rigid vehicle exceeding 4.5 tonnes, but not exceeding 9.0 tonnes gross vehicle mass (GVM)

C3

Rigid vehicle exceeding 9.0 tonnes, but not exceeding 13.9 tonnes gross vehicle mass (GVM)

C4

Rigid vehicle exceeding 13.9 tonnes, but not exceeding 16.0 tonnes gross vehicle mass (GVM)

C5

Rigid vehicle exceeding 16.0 tonnes, but not exceeding 20.0 tonnes gross vehicle mass (GVM)

C6

Rigid vehicle exceeding 20.0 tonnes gross vehicle mass (GVM)

C7

Prime mover with 2 axles (‘single axle prime mover’)

C8

Prime mover with 3 axles (‘bogie axle prime mover’)

C9

Prime mover with 4 axles or more

B.4—Tables of relevant hourly and kilometre rates for a long distance operation…”.

[130] In the Statement 23 accompanying the draft RSRO we said the following in respect of Schedules A and B:

[44] Schedules A and B to the draft … RSRO set out tables with the relevant rate per hour, relevant rate per kilometre and relevant supplementary rate per kilometre for the contractor drivers to whom the draft … RSRO applies. 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 driver, 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.

[45] The rates are those in the KPMG report. However, the KPMG report does not deal with the situation where the hirer supplies the trailer and vehicle for the road transport service provided by the contractor driver. The rates for such a contractor driver in Schedules A and B to the draft … RSRO are based on the terms and conditions in the relevant modern awards, together with a component recognising the contractor driver is not an employee.

[46] The assumptions underpinning the KPMG report have been the subject of comment by various parties. The draft … RSRO, however, does not specify the cost model in the KPMG report, rather it specifies the rates from that report. Any RSRO based on the draft … RSRO may, of course, require adjustment of the rates in Schedules A and B to the draft … RSRO, including to accommodate different cost model assumptions. For example, an adjustment by adding to the relevant rate per hour for a contractor driver who provides a road transport service using a vehicle supplied by the driver, all or part of the relevant rate per hour for a contractor driver who provides a road transport service using a vehicle supplied by the hirer. This would accommodate a cost model where labour costs are built more into the rate per hour than the rate per kilometre. An adjustment which may be particularly appropriate to the circumstances in which a vehicle is not being driven but is still being used in the provision of the road transport service.

[47] Further, the rates may also require adjustment having regard to the final form of any facilitative provisions and the definitions contained therein.

[48] In addition, not all the transport worker grade, type of trailer and class of vehicle configurations in Schedules A and B to the draft … RSRO may apply in practice. For example, a Transport Worker Grade 1 is not appropriate for a road transport service using a C9 class of vehicle and a TC6 type of trailer. The tables in Schedules A and B to the draft … RSRO may therefore benefit from removing those configurations which cannot apply in practice. Again this is a matter on which submissions are particularly sought.

[49] Schedules A and B provide rates operative from 1 January 2016, 1 January 2017, 1 January 2018 and 1 January 2019. The rates from 1 January 2017 are the rates from 1 January 2016 increased by 3.2% each year. The rates from 1 January each year thereafter are the rates from the previous 1 January increased by 3.2%. The 3.2% increase is the Average Annualised Wage Increase in enterprise agreements approved by the Fair Work Commission (FWC) in ‘Transport, Postal and Warehousing’ over the year to the March quarter 2015.” [Endnote omitted]

[131] The TWU and some others supported clauses A.2 and B.2 being included in a RSRO on the basis they provided certainty and clarity for hirers, contractor drivers and other participants in the supply chain.

[132] Some opposed clauses A.2 and B.2 either in whole or part. Their objections included that:

● no mechanism for adjustment of the rates should be included in a RSRO, rather there should be an annual or more frequent review of the rates;

● a more broadly based index or indices should be used for the adjustment of the rates in a RSRO; and

● a formula for the adjustment of the rates should be included in a RSRO.

[133] The Ai Group, NatRoad and Road Freight NSW submitted that if the RSRT mandates specific rates of pay there is merit in the RSRT adopting an approach that affords a degree of certainty to industry about both the rates and future increases. They recognised that a party can make a relevant application during the term of a RSRO to alter applicable rates if specific circumstances warrant a departure from those applying at the time of the making of the RSRO.

[134] We have earlier indicated an operative date of 4 April 2016 for any RSRO.

[135] We have also indicated that we later conclude we should not make the supplementary rates referred to in clauses A.2 and B.2.

[136] We think there is merit in providing certainty about the relevant rates per hour and relevant rates per kilometre over the term of any RSRO, recognising that if circumstances warrant departure from those rates then the RSR Act provides for variation of a RSRO.

[137] However, there is also merit in considering a range of indices and other matters with respect to the quantum of increase in the rates over the term.

[138] The movement in the consumer price index over the 12 months to the September quarter 2015 on seasonally adjusted, trimmed mean and weighted median bases ranged from 1.5% to 2.2%. 24 The increase in full-time adult average weekly ordinary time and total earnings in the year to May 2015 ranged from 1.7% to 2.0%.25 The wage price index rose 2.3% (2.1% in the private sector, 2.7% in the public sector) over the year to the September quarter 2015.26 The Average Annualised Wage Increase in enterprise agreements approved by the Fair Work Commission (FWC) over the year to the September quarter 2015 was 3.4% and in “Transport, Postal and Warehousing” was 3.2%.27

[139] Toll witness, Mr Greg Smith, General Manager for Toll NQX, a business unit within Toll Transport Pty Ltd gave evidence that their contractual increases for a large national supermarket chain are capped at 2% per year. 28

[140] We think the quantum of adjustment in the draft RSRO should be revised and that adjustment of 2% per annum is more appropriate in the circumstances.

[141] There was little support for including a relevant rate for a contractor driver who does not supply the vehicle and/or trailers required for the provision of the road transport service. We think those in the draft RSRO should be deleted.

[142] The Transport Worker Grades, types of trailer and classes of vehicle included in the draft RSRO were, in general, not regarded as inappropriate. Mr Nick Leon, a lawyer at Linfox, made suggestions about limiting the transport worker grade, trailer and vehicle configurations in Schedules A and B to the draft RSRO. His suggestions in this regard were not considered inappropriate by others.

[143] There were, however, submissions and other material provided to us about the rates contained in Schedules A and B to the draft RSRO.

[144] Those submissions, material and comments ranged from strong support for the rates to opposition to any rates in a RSRO. Within this range there were also concerns expressed about KPMG’s approach in developing the rates. This included concerns about:

● the inclusion of the Goods and Services Tax (GST);
● the labour costs used now being out of date and understated;
● the fuel price now being lower;
● the level of the fuel rebate;
● the fuel burn rates adopted;
● the values attributed to the vehicles and trailers;
● the finance costs adopted, such as the finance interest rate;
● the inclusion of depreciation;
● the exclusion of the residual vehicle value at the end of the loan term;
● the weekly hours of work attributed to contractor drivers;
● the number of working weeks per year adopted;
● the tyre costs and tyre wear adopted;
● the repair and maintenance costs adopted;
● the registration, insurance and administration costs adopted;
● the inclusion of telematics’ costs; and
● the absence of any profit component.

[145] In establishing minimum rates in any RSRO, the KPMG developed rates have proven useful in focusing parties’ submissions, material and comments. The submissions, material and comments have raised many issues of merit warranting changes to the minimum rates in the draft RSRO.

[146] We think there is merit in any RSRO having GST exclusive rates. This would leave GST to be added, where appropriate, to the valid taxation invoice provided by or generated for a contractor driver. There is also merit in excluding the supplementary rates provided for in the draft RSRO. Such exclusion would, without much compromise, make a RSRO less complex, simpler and easier to understand and minimise the compliance burden on the road transport industry.

[147] In determining the minimum rates, however, a variety of matters are required to be balanced. Notions of cost recovery, which underpinned the KPMG developed rates, being a sub-element of the matters.

[148] The adjustment of the KPMG developed rates, having regard to that balancing of matters in light of the considerations raised in the submissions, material and comments before us, results in the minimum per hour and per kilometre rates set out in Schedules A and B to Attachment A of this decision.

[149] These revised minimum rates for a distribution operation, which exclude GST, are considerably less than those in the draft RSRO, which included GST, and lower than those in the NSW General Carriers Contract Determination.

[150] For example, a contractor driver supplied bogie axle prime mover hauling a hirer supplied semi-trailer has the following minimum rates for a distribution operation under these instruments or publications:

 

$ per hour

$ per kilometre

NSW (excl. GST)

57.51

1.6112

Draft RSRO (incl. GST)

57.40

1.60

RSRO (excl. GST)

47.98

1.30

[151] Linfox and Toll submitted the minimum rates they would support. 29 These included the following minimum rates for a contractor driver engaged in a supermarket distribution operation, in other than Tasmania and the Northern Territory, using a contractor driver supplied bogie axle prime mover hauling a hirer supplied semi-trailer:

 

$ per hour

$ per kilometre

Linfox/Toll (excl. GST)

42.094

$0.638

[152] In the alternative, Australian Business Industrial (ABI), the NSW Business Chamber Limited (NSW Business Chamber) and the Retail Council supported the Linfox and Toll proposal on minimum rates.

[153] However, the minimum rates proposed by Linfox and Toll result in considerably lower payments than those their witnesses indicated they currently provide to the contractor drivers engaged in supermarket distribution operations. The Linfox and Toll proposed minimum rates are also lower than a reasonable cost recovery approach would suggest as the minimum payments that should be made.

[154] For example, Mr Steven Borg, a General Manager for Toll Transport Pty Ltd gave evidence about the trip rates they pay a contractor driver engaged in supermarket distribution operations in Tasmania using a contractor driver supplied bogie axle prime mover hauling a hirer supplied semi-trailer. The examples he gave involved a contractor driver performing 8.5 hours’ work and travelling 196 kilometres and also a contractor driver performing 8 hours’ work and travelling 488 kilometres. 30 The respective trip rates under these examples from the payments identified by Mr Borg and from the rates in the draft RSRO, the NSW General Carriers Contract Determination, the Linfox/Toll supported minimum rates and any RSRO would be:

 

$ for 8.5 hours and 196 kilometres

NSW (excl. GST)

804.63

Draft RSRO (incl. GST)

801.50

RSRO (excl. GST)

662.63

Borg (excl. GST)

583.36

Linfox/Toll (excl. GST)

482.85

 

$ for 8 hours and 488 kilometres

NSW (excl. GST)

1246.35

Draft RSRO (incl. GST)

1240.00

RSRO (excl. GST)

1018.24

Borg (excl. GST)

833.06

Linfox/Toll (excl. GST)

648.10

Note: Under any RSRO the minimum rates for a long distance operation of 501 kilometres would produce a trip rate of $894.65 in this example.

[155] Mr Alec Trikash, the National Road Manager for Toll Transport Pty Ltd said they would pay a contractor driver engaged in supermarket distribution operations in Adelaide using a contractor driver supplied bogie axle prime mover hauling a hirer supplied semi-trailer at $71 per hour. He gave an example of such a contractor driver performing 10.5 hours’ work and travelling 200 kilometres for that work. 31 The respective trip rates under the example from the payments identified by Mr Trikash and from the rates in the draft RSRO, the NSW General Carriers Contract Determination, the Linfox/Toll supported minimum rates and any RSRO would be:

 

$ for 10.5 hours and 200 kilometres

NSW (excl. GST)

926.10

Draft RSRO (incl. GST)

922.70

RSRO (excl. GST)

763.79

Trikash (excl. GST)

745.50

Linfox/Toll (excl. GST)

569.59

[156] Mr Michael Freestone, NSW Regional Manager for Toll Contract Logistics Pty Ltd gave evidence about the trip rate they pay a contractor driver engaged in supermarket distribution operations in NSW using a contractor driver supplied bogie axle prime mover hauling a hirer supplied semi-trailer. The example he gave involved 10.5 hours’ work and travel of 400 kilometres. 32 The respective trip rates under the example from the payments identified by Mr Freestone and from the rates in the draft RSRO, the NSW General Carriers Contract Determination, the Linfox/Toll supported minimum rates and any RSRO would be:

 

$ for 10.5 hours and 400 kilometres

NSW (excl. GST)

1248.34

Draft RSRO (incl. GST)

1242.70

RSRO (excl. GST)

1023.79

Freestone (excl. GST)

798.00

Linfox/Toll (excl. GST)

697.19

Note: Under any RSRO the minimum rates for a long distance operation of 501 kilometres would produce a trip rate of $953.48 in this example.

[157] From these examples, it is evident that currently Toll pays a contractor driver $52.50 more for doing an extra 200 kilometres in a 10.5 hour trip.

[158] The revised minimum rates for a long distance operation, which exclude GST, are considerably less than those in the draft RSRO, which included GST.

[159] For example, a contractor driver supplied bogie axle prime mover hauling a hirer supplied semi-trailer has the following minimum rates for a long distance operation under these instruments or publications:

 

$ per hour

$ per kilometre

Draft RSRO (incl. GST)

33.87

1.59

RSRO (excl. GST)

23.53

1.41

[160] A contractor driver supplied bogie axle prime mover hauling a hirer supplied B-Double trailer has the following minimum rates for a long distance operation under these instruments or publications:

 

$ per hour

$ per kilometre

Draft RSRO (incl. GST)

33.87

1.83

RSRO (excl. GST)

23.53

1.58

[161] A contractor driver supplied bogie axle prime mover hauling a contractor driver supplied B-Double trailer has the following minimum rates for a long distance operation under these instruments or publications:

 

$ per hour

$ per kilometre

Draft RSRO (incl. GST)

52.14

2.07

RSRO (excl. GST)

35.33

1.81

[162] Linfox and Toll did not detail the specific minimum rates they would support for a contractor driver engaged in a long distance operation. Further, they submitted that if the RSRT was minded to make such minimum rates then the rates should be confined to road transport services provided on the major transport corridors between capital cities on the eastern seaboard of Australia. ABI, the NSW Business Chamber and the Retail Council supported this in the alternative.

[163] Nonetheless, various witnesses gave evidence about the payments they currently provide for long distance operations.

[164] Mr Geoffrey Beattie, NSW Transport Manager for Patrick Autocare Pty Limited, gave evidence of the trip rates they pay a contractor driver engaged in various long distance operations in NSW using a contractor driver supplied bogie axle prime mover and a hirer supplied semi-trailer. 33 The trip rate from Sydney to Dubbo in NSW and return compared to that from the rates in the draft RSRO and those under any RSRO would be:

 

$ for 12.8 hours and 820 kilometres

Draft RSRO (incl. GST)

1737.34

RSRO (excl. GST)

1457.38

Beattie (excl. GST)

1345.46

[165] Mr Greg Smith, General Manager of Toll NQX, a business unit within the employing entity of Toll Transport Pty Ltd gave evidence of the trip rate they pay a contractor driver engaged in a long distance operation from the Gold Coast in Queensland to Clybucca in NSW and return using a contractor driver supplied bogie axle prime mover hauling a hirer supplied B-Double trailer. 34 That trip rate compared to that from the rates in the draft RSRO and those under any RSRO would be:

 

$ for 10.5 hours and 868 kilometres

Draft RSRO (incl. GST)

1944.08

RSRO (excl. GST)

1618.51

Smith (excl. GST)

1508.22

[166] Mr Steve Fanning, Divisional General Manager of the McAleese Group gave evidence of the trip rates currently paid to a contractor driver engaged in a long distance operation from Melbourne to Brisbane and return using a contractor driver supplied bogie axle prime mover and contractor driver supplied B-Double trailer. 35 That trip rate compared to that from the rates in the draft RSRO and those under any RSRO is:

 

$ for 37 hours and 3350 kilometres

Draft RSRO (incl. GST)

8863.68

RSRO (excl. GST)

7370.71

Fanning (excl. GST)

6180 to 7253

[167] The minimum payments under any RSRO in these trip examples, even though they exclude rest time payments, are less than the trip rates at which witnesses indicated they may substitute contractor drivers for employee drivers.

[168] In the submissions and hearings, we were provided with only a small sample of the payments currently made for the road transport services provided by contractor drivers to whom the draft RSRO applied. Further, the information provided with some of those payments was insufficient to enable a meaningful comparison of the trip rates currently being paid for those road transport services with other means of calculating a trip rate for them.

[169] As we indicated earlier, the sample does suggest that a hirer who engages a contractor driver for a distribution operation should be able to pay the contractor driver at the minimum rates for a long distance operation on each day the road transport service provided by the contractor driver for the hirer necessarily involves 400 or more kilometres travel. We earlier included such a provision at clause 9.2.

[170] In terms of cost recovery and the significant factors therein, the revised minimum rates exclude GST, exclude depreciation, increase the period over which the standing and running costs of providing a road transport service are recovered compared to that in the KPMG cost model, and take into account the current wage rates in relevant modern awards. The revised rates also recognise the decline in finance and fuel costs, including the change to the fuel rebate, since the KPMG developed cost model and the residual vehicle value at the end of the loan term. Further, they recognise the range of fuel burn rates, vehicle and trailer values and the values attached to other standing and running costs in providing a road transport service in the submissions, material and comments before us.

[171] The revised minimum rates, however, do not merely reflect notions of cost recovery. This is because the RSR Act requires the RSRT in deciding whether to make a RSRO to have regard to a range of matters. 36 As we have indicated, notions of cost recovery can be regarded as a sub-element of those matters, but do not constitute the totality of the matters the RSRT is required to have regard to in deciding whether to make a RSRO.

[172] Later in this decision, we deal further with the matters the RSRT is required to have regard to in deciding whether to make a RSRO and the balancing of those matters.

[173] The resultant Schedules A and B for any RSRO, from the above considerations, are as follows:

A.1 Application of Schedule A

This Schedule A sets out the relevant rate per hour and relevant rate per kilometre that a hirer must pay a contractor driver for the purposes of clause 9.

A.2 Relevant rates from 4 April 2016, 4 April 2017, 4 April 2018 and 4 April 2019

A.2.1 The relevant rate per hour and relevant rate per kilometre for the purposes of clause 9 are set out in the tables in clause A.4 of this Schedule A.

A.2.2 From 4 April 2017, the relevant rate per hour and relevant rate per kilometre for the purposes of clause 9 are those in clause A.2.1 increased by 2%.

A.2.3 From 4 April 2018, the relevant rate per hour and relevant rate per kilometre for the purposes of clause 9 are those in clause A.2.2 increased by 2%.

A.2.4 From 4 April 2019, the relevant rate per hour and relevant rate per kilometre for the purposes of clause 9 are those in clause A.2.3 increased by 2%.

A.3 Determining the relevant rates

A.3.1 Relevant rate per hour and relevant rate per kilometre

A.3.1.1 Where the contractor driver supplies the vehicle and there is no trailer or the hirer or the driver supplies the trailer(s) used in the provision of the road transport service, the relevant rate per hour and relevant rate per kilometre is in the tables in subclauses A.4.1 to A.4.10 of this Schedule A and is that which applies to:

(a) the Transport Worker Grade of the driver providing the road transport service; and

(b) whether a trailer is used in the provision of the road transport service and, if so, whether the hirer or the driver supplies the trailer(s) used in the provision of the road transport service; and

(c) the type of trailer(s), if any, used in the provision of the road transport service; and

(d) the class of the vehicle the driver supplies and which is used in the provision of the road transport service.

A.3.2 Transport Worker Grade

A.3.2.1 The Transport Worker Grade of the contractor driver providing the road transport service is the Grade in the table below which corresponds with the Description of the work or driving undertaken, in whole or in part, in providing the road transport service:

Transport Worker Grade and Description of the work or driving

Grade

Description of the work or driving

1

General hand, greaser and cleaner, motor driver’s assistance, loader courier

2

Driving a rigid vehicle (including a motor cycle) not exceeding 4.5 tonnes gross vehicle mass (GVM)

3

Driving a two-axle rigid vehicle or any other rigid vehicle exceeding 4.5 tonnes, but not exceeding 13.9 tonnes gross vehicle mass (GVM)

4

Driving a three-axle rigid vehicle exceeding 16.9 tonnes gross vehicle mass (GVM)

5

Driving a rigid vehicle with four or more axles and a GVM exceeding 13.9 tonnes, or driving a rigid vehicle and heavy trailer combination with three axles and a GCM of 22.4 tonnes or less, or driving an articulated vehicle with three axles and a GCM of 22.4 tonnes or less

6

Driving a rigid vehicle and a heavy trailer combination with more than three axles and a GCM greater than 22.4 tonnes, or driving an articulated vehicle with more than three axles and a GCM greater than 22.4 tonnes

7

Driving a double articulated vehicle up to and including 53.4 tonnes GCM, including B-Doubles

8

Driving a rigid vehicle and trailer(s) or double articulated vehicle exceeding 53.4 tonnes GCM, including B-Doubles

9

Driving a rigid vehicle with trailer combinations or articulated vehicle with trailer combinations exceeding 94 tonnes GCM

10

Driving a multi-axle platform trailing equipment with a carrying capacity in excess of 70 tonnes

A.3.3 Type of trailer

A.3.3.1 The Type of trailer used in the road transport service provided by the contractor driver is the Type in the tables below which corresponds with the Description of the trailer that the contractor driver uses in providing the road transport service:

Types of trailer and Description of the trailer

Single trailer types

Type

Description of the trailer

T1

Converter dolly

T2

Pig trailer

T3

Dog trailer

T4

Low loader

T5

Semi trailer

T6

B-double lead trailer

T7

Refrigerated trailer

Multiple trailer types

Type

Description of the trailer

Trailer Combination

TC1

B-Double

T6 + T5

TC2

A-Double

T5 + T1 + T5

TC3

B Triple

T6 + T5 + T5

TC4

A B Combination

T5 + T1 + T6 + T5

TC5

A Triple

T5 + T1 + T5 + T1 + T5

TC6

Double B-Double

T6 + T5 + T1 + T6 + T5

A.3.4 Class of vehicle

A.3.4.1 The Class of vehicle used in the road transport service provided by the contractor driver is the Class in the table below which corresponds with the Description of the vehicle that the contractor driver uses in providing the road transport service:

Class of vehicle and Description of vehicle

Class

Description of the vehicle

LCV

Rigid vehicle up to and including 3.5 tonnes gross vehicle mass (GVM)

C1

Rigid vehicle exceeding 3.5 tonnes, but not exceeding 4.5 tonnes gross vehicle mass (GVM)

C2

Rigid vehicle exceeding 4.5 tonnes, but not exceeding 9.0 tonnes gross vehicle mass (GVM)

C3

Rigid vehicle exceeding 9.0 tonnes, but not exceeding 13.9 tonnes gross vehicle mass (GVM)

C4

Rigid vehicle exceeding 13.9 tonnes, but not exceeding 16.0 tonnes gross vehicle mass (GVM)

C5

Rigid vehicle exceeding 16.0 tonnes, but not exceeding 20.0 tonnes gross vehicle mass (GVM)

C6

Rigid vehicle exceeding 20.0 tonnes gross vehicle mass (GVM)

C7

Prime mover with 2 axles (“single axle prime mover”)

C8

Prime mover with 3 axles (“bogie axle prime mover”)

C9

Prime mover with 4 axles or more

A.4—Tables of relevant hourly and kilometre rates, excluding Goods and Services Tax, for a distribution operation

B.1 Application of Schedule B

This Schedule B sets out the relevant rate per hour and relevant rate per kilometre that a hirer must pay a contractor driver for the purposes of clause 10.

B.2 Relevant rates from 4 April 2016, 4 April 2017, 4 April 2018 and 4 April 2019

B.2.1 The relevant rate per hour and relevant rate per kilometre for the purposes of clause 10 are set out in the tables in clause B.4 of this Schedule B.

B.2.2 From 4 April 2017, the relevant rate per hour and relevant rate per kilometre for the purposes of clause 10 are those in clause B.2.1 increased by 2%.

B.2.3 From 4 April 2018, the relevant rate per hour and relevant rate per kilometre for the purposes of clause 10 are those in clause B.2.2 increased by 2%.

B.2.4 From 4 April 2019, the relevant rate per hour and relevant rate per kilometre for the purposes of clause 10 are those in clause B.2.3 increased by 2%.

B.3 Determining the relevant rates

B.3.1 Relevant rate per hour and relevant rate per kilometre

B.3.1.1 Where the contractor driver supplies the vehicle and there is no trailer or the hirer or the driver supplies the trailer(s) used in the provision of the road transport service, the relevant rate per hour and relevant rate per kilometre is in the tables in subclauses B.4.1 to B.4.8 of this Schedule B and is that which applies to:

(a) the Transport Worker Grade of the driver providing the road transport service; and

(b) whether a trailer is used in the provision of the road transport service and, if so, whether the hirer or the driver supplies the trailer(s) used in the provision of the road transport service; and

(c) the type of trailer(s), if any, used in the provision of the road transport service; and

(d) the class of the vehicle the driver supplies and which is used in the provision of the road transport service.

B.3.2 Transport Worker Grade

B.3.2.1 The Transport Worker Grade of the contractor driver providing the road transport service is the Grade in the table below which corresponds with the Description of the work or driving undertaken, in whole or in part, in providing the road transport service:

Transport Worker Grade and Description of the work or driving

Grade

Description of the work or driving

1

Driving a two axle rigid vehicle up to 13.9 tonnes GVM. Capacity up to eight tonnes

2

Driving a three axle rigid vehicle over 13.9 tonnes GVM. Capacity over eight and up to 12 tonnes

3

Driving a four axle rigid vehicle over 13.9 tonnes GVM, or driver of a rigid vehicle and heavy trailer combination with GCM of 22.4 tonnes or less, or driver of articulated vehicle with GCM of 22.4 tonnes or less

4

Driving a rigid vehicle and heavy trailer combination with GCM over 22.4 tonnes but not more than 42.5 tonnes, or driver of articulated vehicle with GCM over 22.4 tonnes

5

Driving a rigid vehicle and heavy trailer combination with GCM over 42.5 tonnes but not more than 53.4 tonnes, or driving a double articulated vehicle with GCM 53.4 tonnes or less (includes B-doubles)

6

Driving a rigid vehicle and trailer(s), or double articulated vehicle with GCM over 53.4 tonnes (includes B-doubles)

7

Driving a road train or triple articulated vehicle exceeding 94 tonnes GCM

8

Driving a vehicle with multi-axle trailing equipment

B.3.3 Type of trailer

B.3.3.1 The Type of trailer used in the road transport service provided by the contractor driver is the Type in the tables below which corresponds with the Description of the trailer that the contractor driver uses in providing the road transport service:

Types of trailer and Description of the trailer

Single trailer types

Type

Description of the trailer

T1

Converter dolly

T2

Pig trailer

T3

Dog trailer

T4

Low loader

T5

Semi trailer

T6

B-double lead trailer

T7

Refrigerated trailer

Multiple trailer types

Type

Description of the trailer

Trailer Combination

TC1

B-Double

T6 + T5

TC2

A-Double

T5 + T1 + T5

TC3

B Triple

T6 + T5 + T5

TC4

A B Combination

T5 + T1 + T6 + T5

TC5

A Triple

T5 + T1 + T5 + T1 + T5

TC6

Double B-Double

T6 + T5 + T1 + T6 + T5

B.3.4 Class of vehicle

B.3.4.1 The Class of vehicle used in the road transport service provided by the contractor driver is the Class in the table below which corresponds with the Description of the vehicle that the contractor driver uses in providing the road transport service:

Class of vehicle and Description of vehicle

Class

Description of the vehicle

LCV

Rigid vehicle up to and including 3.5 tonnes gross vehicle mass (GVM)

C1

Rigid vehicle exceeding 3.5 tonnes, but not exceeding 4.5 tonnes gross vehicle mass (GVM)

C2

Rigid vehicle exceeding 4.5 tonnes, but not exceeding 9.0 tonnes gross vehicle mass (GVM)

C3

Rigid vehicle exceeding 9.0 tonnes, but not exceeding 13.9 tonnes gross vehicle mass (GVM)

C4

Rigid vehicle exceeding 13.9 tonnes, but not exceeding 16.0 tonnes gross vehicle mass (GVM)

C5

Rigid vehicle exceeding 16.0 tonnes, but not exceeding 20.0 tonnes gross vehicle mass (GVM)

C6

Rigid vehicle exceeding 20.0 tonnes gross vehicle mass (GVM)

C7

Prime mover with 2 axles (“single axle prime mover”)

C8

Prime mover with 3 axles (“bogie axle prime mover”)

C9

Prime mover with 4 axles or more

B.4Tables of relevant hourly and kilometre rates, excluding Goods and Services Tax, for a long distance operation…”.

Other clauses

(a) Supply chain transparency

[174] Linfox sought that the following clause be included in any RSRO:

X. Supply chain transparency

X.1 Following any increase of the relevant rates in Schedule A.2 a hirer must inform the consignor of the relevant increase and the amount the hirer is paying a contractor driver pursuant to a road transport contract.

X.2 Following an increase as described in X.1 above, a hirer may request a consignor to review the amounts paid by the consignor to the hirer for the provision of services under a road transport contract.

X.3 When the consignor receives a request as described in X.2 above, the consignor must, within 30 days of receiving the said request in writing, conduct a review in consultation with the hirer and determine the amount of an increase in payments made to the hirer by no more than the same increase of the relevant rates in Schedule A.2.

X.4 Where it is determined that an increase is payable to the hirer, the consignor must accept a variation to the rates payable to the hirer by the consignor proportionate to the increase described in subclause X.1 above.” 37

[175] Such a clause was not included in the draft RSRO. We think further consideration of the merits and wording of such a clause is needed. Linfox and others are at liberty to make application to include such a clause in any RSRO.

(b) Alternative systems of remuneration

[176] Linfox also sought that the following clause be included in a RSRO:

X. Alternative systems of remuneration

X.1 Despite the clause … and Schedule A, a hirer who engages a contractor driver to provide a road transport service may pay a contractor driver based on a system or method different to that set out in Schedule A, provided that the contractor driver receives no less than the amount they would otherwise have received had they been paid in accordance with Schedule A.

X.2 A hirer must ensure that the contractor driver receives an amount which is no less than the amount the contractor driver would otherwise have earned to provide a road transport service had the contractor driver been remunerated in accordance with Schedule A, averaged over a 30 day safety net period.

X.3 A hirer must inform the contractor driver, in writing, of the system or method of payment under which they are to be paid, and which differs from the rates set out in Schedule A, prior to the change of the system or method of payment.

X.4 A hirer may require a contractor driver to maintain the records required to calculate the safety net referred to in X.2 above.

X.5 If the contractor is owed a safety net top up as described in X.3, the hirer must, within 30 days, pay the contractor driver the top up.” 38

[177] Further, Linfox and Toll, supported by some others, suggested differential minimum rates for some major transport corridors having regard to the freight imbalance on such corridors.

[178] Along similar lines, VicForests sought the following clause:

Minimum Payments

The requirements of this clause are deemed to have been met if the total payment or payments made to a contractor driver by an employer or hirer in relation to a road transport service are equal or greater than the sum of the rates prescribed in clauses 10.1, 10.2 and 10.3.” 39

[179] The Ai Group, NatRoad and Road Freight NSW also sought the following clause:

Absorption

A hirer has the right to absorb any monetary obligation imposed on the hirer by clause 9 or clause 10 of this order into any payments made by a hirer that are equal to or in excess of the rates prescribed by the order. Nothing in this order requires an employer to maintain or increase any such payment.” 40

[180] We recognise that some hirers pay their contractor drivers by methods other than those set out in the draft RSRO. For example, George Weston Foods Limited (GWF) gave the following submission about the remuneration structure for their contractor drivers who deliver bread and bakery products:

The Remuneration Structure

Our contractors are paid under a planned time and distance schedule for each unit sold. Our total annual costs are divided by historical data regarding volume sold, to derive the cents payable per unit sold. If more product is sold, the contractor may receive a higher amount of remuneration.

This payment model is supported by a review mechanism to deal with declining volume as a result of market forces. To determine the amount payable per unit, we capture all anticipated work and travel time, fixed and variable vehicle costs and other associated expenses of running a small business. Costs are then divided into the historical 52 weeks of net sales of the designated customer listing.

The level of remuneration received by a driver is not influenced by the time they spend driving. They will not be given additional work as a result of having competed what was allocated to them in a shorter timeframe than what was anticipated. Nonetheless, through optimising their route by securing more flexible arrangements with our customers, we understand that many drivers are able to perform their deliveries in a more efficient manner than GWF schedules. This in turn reduces their costs.

The remuneration method we adopt enables drivers to increase their remuneration by promoting greater sales volumes. They are able, to a degree, to influence this through their interactions with customers. GWF believes that many contractors value this aspect of their engagement and would not support the replacement of the current system with a model of remuneration based on payment by the hour or kilometre.” 41

[181] We also recognise there is an imbalance in the freight load in Australia, such that in long distance operations more freight is transported to some destinations than is transported from the destinations. This results in a variety of payment behaviours. Some hirers pay their contractor drivers considerably more for a road transport service to such destinations than they pay for a road transport service from such destinations. Other hirers only pay a contractor driver for a road transport service to such destinations, leaving it to the contractor driver to find another hirer to pay for their return or to return unpaid.

[182] The Divisional General Manager of one hirer gave evidence that the payments to contractor drivers for a road transport service from Melbourne to Brisbane are between 9 and 21% higher than the payments from the rates in the draft RSRO, and from Brisbane to Melbourne are between 49 and 58% less than the payments from the rates in the draft RSRO. He conceded the hirer’s payments to the contractor driver for the road transport service from Brisbane to Melbourne would not cover the costs incurred by the contractor driver in providing that road transport service. However, his evidence was that the payments currently received by the contractor driver for the whole round trip, Melbourne to Brisbane to Melbourne, are “adequate for what [the contractor driver] need[s].” 42

[183] There was also evidence that some hirers engage a contractor driver to provide a variety of road transport services over a period of time. An effect of this is that over the period the contractor driver provides some road transport services for which they receive payments that cover or more than cover their costs and also provide some road transport services for which the payments do not cover their costs.

[184] Having regard to the extant different payment methods, we think there is merit in providing a period of transition to a per hour and per kilometre method of payment for distribution operations. Further, having regard to the extant different payment methods and the freight imbalance, we think there is merit in allowing different payment methods for long distance operations, subject to the amount paid over a period being no less than the amount the hirer would have otherwise had to pay under any RSRO, including in accordance with clause 11.

[185] We earlier considered the submissions on the commencement and expiry of any RSRO. We considered there was merit in providing for a delay in the commencement of any RSRO to 4 April 2016. A further transitional period for distribution operations of some months should assist the transition to hourly and kilometre payment methods from those currently applying, including providing a period for the making of a collective agreement which may deal with other methods of payment.

[186] We also think that for long distance operations a reconciliation period of 28 days, being four weeks, similar to the 30 day period suggested by Linfox is appropriate. However, we think advice from the hirer to the contractor driver about their method of payment and any requirement for the contractor driver to maintain records for the purposes of the reconciliation, as well as any of the remaining suggestions in respect of absorption clauses, are best left to the contractual arrangements between them.

[187] This results in the following addition to clause 9 that we earlier set out:

9.3 A hirer who engages a contractor driver to provide a road transport service which does not involve a long distance operation may pay the contractor driver for the road transport service by a method other than that in subclauses 9.1 and 9.2, provided that the other method does not result in the hirer paying the contractor driver, over a period of 28 consecutive days, an amount which is less than the amount the hirer would have had to pay the contractor driver under subclauses 9.1 and 9.2 over the period of 28 consecutive days.

9.4 A hirer who, under subclause 9.3, pays a contractor driver by a method other than that in subclauses 9.1 and 9.2 must:

(a) keep records which set out the amount the hirer would have had to pay the contractor driver under subclause 9.1 over the period of 28 consecutive days and how that amount has been calculated; and

(b) pay the contractor driver the difference between the amount the hirer has paid or is to pay the contractor driver, under subclause 9.3, over the period of 28 consecutive days and the amount the hirer would have had to pay the contractor driver, under subclauses 9.1 and 9.2, over the period of 28 consecutive days; and

(c) generate a valid taxation invoice for the contractor driver covering the difference between the two amounts in subclause 9.4(b) and must pay the contractor driver the difference between the two amounts within 30 days after the period of 28 consecutive days.

9.5 Subclauses 9.3 to 9.4 cease to operate at midnight on 3 October 2016.”

[188] This also results in the following addition to clause 10 that we earlier set out:

10.2 A hirer who engages a contractor driver to provide a road transport service which does involve a long distance operation may pay the contractor driver for the road transport service by a method other than that in subclause 10.1, provided that the other method does not result in the hirer paying the contractor driver, over a period of 28 consecutive days, an amount which is less than the amount the hirer would have had to pay the contractor driver under subclause 10.1 over the period of 28 consecutive days.

10.3 A hirer who, under subclause 10.2, pays a contractor driver by a method other than that in subclause 10.1 must:

(a) keep records which set out the amount the hirer would have had to pay the contractor driver under subclause 10.1 over the period of 28 consecutive days and how that amount has been calculated; and

(b) pay the contractor driver the difference between the amount the hirer has paid or is to pay the contractor driver, under subclause 10.2, over the period of 28 consecutive days and the amount the hirer would have had to pay the contractor driver, under subclause 10.1, over the period of 28 consecutive days; and

(c) generate a valid taxation invoice for the contractor driver covering the difference between the two amounts in subclause 10.3(b) and must pay the contractor driver the difference between the two amounts within 30 days after the period of 28 consecutive days.”

Jurisdiction

[189] The object of the RSR Act is set out in s.3 as follows:

3 Object

The object of this Act is to promote safety and fairness in the road transport industry by doing the following:

(a) ensuring that road transport drivers do not have remuneration-related incentives to work in an unsafe manner;

(b) removing remuneration-related incentives, pressures and practices that contribute to unsafe work practices;

(c) ensuring that road transport drivers are paid for their work, including loading or unloading their vehicles or waiting for someone else to load or unload their vehicles;

(d) developing and applying reasonable and enforceable standards throughout the road transport industry supply chain to ensure the safety of road transport drivers;

(e) ensuring that hirers of road transport drivers and participants in the supply chain take responsibility for implementing and maintaining those standards;

(f) facilitating access to dispute resolution procedures relating to remuneration and related conditions for road transport drivers.”

[190] Section 19(1) of the RSR Act provides that the “Tribunal may make a road safety remuneration order under this Part consistent with the object of this Act.” A note to s.19(1) states that s.27 provides for what a RSRO may deal with.

[191] Section 27 of the RSR Act is as follows:

27 Making road safety remuneration order

What the order may deal with

(1) If the Tribunal decides to make a road safety remuneration order, the Tribunal may make any provision in the order that the Tribunal considers appropriate in relation to remuneration and related conditions for road transport drivers to whom the order applies.

(2) Without limiting subsection (1), the Tribunal may make provision in the order in relation to any of the following:

(a) conditions about minimum remuneration and other entitlements for road transport drivers who are employees, additional to those set out in any modern award relevant to the road transport industry (see subsection 20(2));

(b) conditions about minimum rates of remuneration and conditions of engagement for contractor drivers;

(c) conditions for loading and unloading vehicles, waiting times, working hours, load limits, payment methods and payment periods;

(d) ways of reducing or removing remuneration-related incentives, pressures and practices that contribute to unsafe work practices.

(3) The order may impose requirements, in relation to a matter for which provision is made, on any or all of the following:

(a) an employer or hirer of a road transport driver to whom the order applies;

(b) a participant in the supply chain in relation to a road transport driver to whom the order applies.

Content of the order

(4) The order must specify:

(a) the road transport drivers to whom the order applies; and

(b) the persons on whom any requirements in the order are imposed; and

(c) a commencement date for the order or a series of commencement dates (see subsection (5)); and

(d) an expiry date for the order (which must not be later than 4 years after the commencement date, or if there is a series of commencement dates, after the earliest of those dates).

(5) The order may take effect in stages (as provided in the order) if the Tribunal considers that it is not feasible for the order to take effect on a single date.

Publication of order

(6) The Tribunal must publish the order on the Tribunal’s website and by any other means the Tribunal considers appropriate.”

[192] Some parties submitted aspects of the draft RSRO were beyond jurisdiction because they were not “in relation to remuneration and related conditions for road transport drivers to whom this order applies.” 43 The aspects included the “Promotion of orders” and “Supply chain contracts” clauses.

[193] Further, the Ai Group, NatRoad and Road Freight NSW and some others suggested the making of, and/or compliance with, the draft RSRO may lead to breaches of the Competition and Consumer Act 2010 (Cth) (the CC Act). The Ai Group, NatRoad and Road Freight NSW submitted the draft RSRO could lead to:

“• Cartel conduct in breach of Division 1 (Cartel Conduct) of Part IV of the CC Act;

• Anti-competitive disclosure of pricing in breach of Division 1A of Part IV of the CC Act; and

• The making of contracts, arrangements of understandings that affect competition in breach of s.45 of the CC Act.” 44

[194] The Ai Group, NatRoad and Road Freight NSW elaborated as follows:

“307. There is a significant risk that the Draft RSRO, if made, could lead to arrangements or understandings being reached between competitors to supply transport services at particular prices above the rates in the RSRO. Such arrangements or understandings would constitute cartel conduct under the CC Act, specifically price-fixing.

308. There is also a significant risk that two or more contractor drivers (e.g. those working for the same hirer) could enter into an arrangement or understanding to supply their services to a transport company (or to a number of transport companies) at prices which align with the Draft RSRO, or at particular prices above the RSRO. Such an arrangement or understanding would constitute cartel conduct if the contractor drivers are incorporated (as a large proportion of them are)…

Anti-competitive disclosure of pricing

310. Section 44ZZW prohibits the private disclosure of pricing information to competitors.

311. The Draft RSRO would create significant risks for road transport companies, contractor drivers and supply chain participants of breaches of s.44ZZW. For example:

Contracts, arrangements and understandings that affect competition

313. Section 45 of the CC Act prohibits a corporation:

• making a contract or arrangement, or arriving at an understanding, if a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition (s.45(2)(a)(ii)); or

• giving effect to a provision of a contract, arrangement or understanding, that has the purpose, or has or is likely to have the effect, of substantially lessening competition (s.45(2)(b)(ii)).

314. There is the risk that the Draft RSRO, if made, could lead to arrangements or understandings between some competitors in the road transport industry, which have the purpose, effect, or likely effect of substantially lessening competition in a market…”. 45

[195] These submissions in respect of the CC Act were the subject of submissions by the Australian Chamber of Commerce and Industry (ACCI), ABI and NSW Business Chamber.

[196] The ACCI, ABI and the NSW Business Chamber said:

Participation in these proceedings

3.5 Corporations (the Competition Law applies specifically to corporations) which are participating in these proceedings are not, in the ordinary course, exposed to potential contraventions of the Competition Law merely by reason of their participation in the proceedings.

3.6 With the exception of the price information disclosure provisions, the Competition Law provisions attach to conduct in connection with a ‘contract, arrangement or understanding’. For example section 45(2) CCA[ct] provides:

‘A corporation shall not:

(a) make a contract or arrangement or arrive at an understanding, if

(i) …

(b) give effect to a provision of a contract, arrangement or understanding…’

3.7 Participation in these proceedings may result in the making on an RSRO. An RSRO is not a contract, arrangement or understanding as these terms are used in the Competition Law. Participating in the proceedings, without more, may result in the making of an RSRO but will not result in the making of a contract, arrangement or understanding between any of the parties.

3.8 The price information disclosure provisions only apply to goods and services of taking deposits and advances of money by authorised deposit-taking institutions (see Regulation 48 of the Competition and Consumer Regulations 2010).

3.9 None of the Competition Law provisions have any relevant application to participation in these proceedings.

Paying minimum cartage rates in compliance with an RSRO

3.10 The Ai Group submissions raise the question of whether the conduct of parties, in paying minimum cartage rates in compliance with an RSRO, gives rise to a potential contravention of the Competition Law.

3.11 In our submission, merely complying with the requirements of an RSRO to make payments of at least the minimum cartage rates as set out in an RSRO does not give rise to any potential contravention of the Competition Law.

3.12 The Competition Law provisions are directed, relevantly, to behaviour of market participants which has the design or effect of lessening competition and or manipulating the market price at which inputs can be purchased or goods and services can be sold.

3.13 An RSRO made in the terms of the Draft Order will have the effect of setting a floor for the market price of cartage. The market price for cartage will be either the minimum cartage rate set by the RSRO or some higher rate as determined by the market. Complying with the RSRO by paying the minimum cartage rate, without reference to anything other than legislative obligations and a driver prepared to accept the rate, does not within the context of the Competition Law involve conduct which has any potential to lessen or manipulate ordinary market competitive forces.

3.14 If, through the ordinary operation of market forces, market rates for cartage are above the RSRO mandated minimum, then conduct by hirers which permits them to artificially drive the rate down to the minimum may contravene the Competition Law. However, such conduct is over and above mere compliance with the Draft RSRO requirements

3.15 The opposite hypothetical situation is equally demonstrative. If the current market rate for cartage is the RSRO-mandated minimum, and drivers (who are corporations) engage in conduct which allows them to demand a higher cartage rate, this conduct may contravene the Competition Law. This constitutes a departure from mere compliance with the Draft RSRO requirements.

3.16 In both hypothetical examples above, the requirement of the RSRO that a minimum rate be paid, sets a price floor. Ordinary competitive market forces will determine whether the prevailing rate is the minimum or some higher rate.

Contracts complying with clause 8.1 and 8.2

3.17 We turn to whether supply chain participants who enter contracts which comply with clauses 8.1 and 8.2 of the Draft Order might be engaged in conduct which is potentially in contravention of the Competition Law.

3.18 The cartel provisions (Part IV Div 1 CCA[ct]) proscribe agreements, arrangements or undertakings, involving market participants who are competitors, which include provisions for the purpose or effect of fixing, controlling or maintaining the price or a discount, allowance or rebate (section 44ZZRD CCA[ct]).

3.19 The cartel provisions operate to prevent collusion between competitors which may influence price. For example two hirers making a commitment to each other to offer drivers or downstream supply chain participants a particular price or a maximum price.

3.20 Clauses 8.1 and 8.2 of the Draft Order mandate certain conditions to be included in the contracts which each hirer offers to downstream supply chain participants. These clauses say nothing about dealings between hirers as competitors. They neither require nor encourage co-operation between hirers.

3.21 The anti-competitive contract provision (section 45 CCA[ct]) proscribes market participants making or giving effect to contracts containing provisions which have the effect of substantially lessening competition.

3.22 Clauses 8.1 and 8.2 will introduce ‘information sharing’ and auditing into the dealings between upstream and downstream supply chain participants. This may also result in upstream participants gaining access to pricing and profit margin information of downstream supply chain participants who are also competitors.

3.23 This may be highly undesirable for the party required to reveal its commercially sensitive and confidential internal pricing information. It is likely to cause the revealing party material competitive disadvantage and offer to the recipient competitive advantage.

3.24 However, even though the compulsory information exchange may well cause significant damage to the downstream market participants, it does not automatically follow that it involves a contravention of section 45 of the CCA[ct]. The concept of lessening competition with which section 45 is concerned involves an assessment of the overall competitive functioning of the market, not the effect of contracts on the competitive vigour of individual market participants. See the decision of the Full Federal Court in Outboard Marine Australia Pty Ltd v Hecar Investments (No 6) Pty Ltd (1982) 66 FLR 120. Fitzgerald J at 134 observed:

‘... where there is a market which is generally competitive, it plainly does not follow that conduct which affects the balance of competition by advantaging or disadvantaging a particular dealer or dealers or a particular product or products necessarily lessens the competition in the market.’

3.25 Although not necessarily in contravention of Competition Law, information sharing of this type is highly undesirable. The language in clause 8.1(d) and (e) of the Draft Order ought to make clear that the second party (the disclosing downstream supply chain participant) is not obliged to disclose confidential and commercially sensitive information regarding pricing and profit margins.” 46

[197] In our view, the above ACCI, ABI and NSW Business Chamber submission answers the submissions of the Ai Group, NatRoad and Road Freight NSW concerning the CC Act.

[198] We are not persuaded there is any jurisdictional impediment to the RSRT making a RSRO or one containing the terms of the clauses remaining from our earlier consideration of the clauses in the draft RSRO (the remaining clauses). We are satisfied we have jurisdiction to make a RSRO and one in the terms of the remaining clauses.

[199] With respect to the subject matter of, or part of, the remaining clauses, the object of the RSR Act, which is referred to in s.19(1) of the RSR Act regarding the RSRT’s power to make a RSRO, is “to promote safety and fairness in the road transport industry” 47 and to do that by a variety of means. Those means include “removing remuneration-related incentives, pressures and practices that contribute to unsafe work practices”,48 “developing and applying reasonable and enforceable standards throughout the road transport industry supply chain to ensure the safety of road transport drivers”49 and “ensuring that hirers of road transport drivers and participants in the supply chain take responsibility for implementing and maintaining those standards”,50 as well as remuneration-related means.

[200] Further, s.27 of the RSR Act concerns what a RSRO may deal with. Section 27(1) provides that the RSRT may make “any provision in the order that the Tribunal considers appropriate in relation to remuneration and related conditions for road transport drivers to whom the order applies. ”51 [Underlining added]

[201] As we have set out, s.27(2) of the RSR Act provides that without limiting s.27(1), “the Tribunal may make provision in the [RSRO] in relation to any of the following:

(a) conditions about minimum remuneration and other entitlements for road transport drivers who are employees, additional to those set out in any modern award relevant to the road transport industry (see subsection 20(2));

(b) conditions about minimum rates of remuneration and conditions of engagement for contractor drivers;

(c) conditions for loading and unloading vehicles, waiting times, working hours, load limits, payment methods and payment periods;

(d) ways of reducing or removing remuneration-related incentives, pressures and practices that contribute to unsafe work practices.” [Underlining added]

[202] The phrase “in relation to” has been interpreted as requiring “no more than a relationship, whether direct or indirect, between two subject matters”, subject to any contrary indication derived from its context or drafting history. 52

[203] The word “remuneration” is defined in s.4 of the RSR Act as follows:

remuneration includes a method for determining remuneration.”

[204] The term “related conditions” is defined in s.4 of the RSR Act as follows:

related conditions include matters of a kind referred to in subsection 27(2).”

[205] Moreover, a grant of legislative power necessarily includes within it “every power and every control the denial of which would render the grant itself ineffective”. 53

[206] The breadth of these provisions and the definitions of the terms and phrases in them indicate the RSRT’s jurisdiction extends to at least the remaining clauses.

[207] The Explanatory Memorandum to the Road Safety Remuneration Bill 2011 (RSR Bill) supports this conclusion.

[208] In respect of clause 3 of the RSR Bill, the Explanatory Memorandum stated:

Clause 3 – Object

8. This clause sets out the object of the Bill. The object is to promote safety and fairness in the road transport industry by doing such things as ensuring that the drivers do not have remuneration-related incentives to work in an unsafe manner and ensuring that all participants in the supply chain take responsibility for ensuring standards are maintained and commercial incentives and pressures and industry practices that contribute to unsafe work practices are removed. Safety and fairness is also to be promoted by facilitating access to dispute resolution procedures relating to remuneration and related conditions.” [Underlining added]

[209] In respect of clause 27 of the RSR Bill, the Explanatory Memorandum stated:

Clause 27 – Making road safety remuneration order

86. This clause provides that the RSRO will be about remuneration and related conditions and sets out to whom the remuneration and related conditions will relate. It also sets out a comprehensive, but not exclusive, list of things the order may relate to, and what the order must specify.

87. Subclause 27(1) provides that the Tribunal may make any provision in the order it considers appropriate in relation to remuneration and related conditions for road transport drivers.

88. Subclause 27(2) provides that the Tribunal can make orders in relation to matters listed in this subclause. It should be noted that this list is also referred to in the definition of ‘related conditions’ as including ‘matters of a kind referred to in subclause 27(2)’. The definition is intended to identify the broad scope of ‘related conditions’, without unduly limiting what the Tribunal may find necessary to make orders about. Also, the beginning of subclause 27(2) specifically notes that the list is not intended to place limits on what the Tribunal can make orders about under subclause 27(1).

89. The list provides guidance to the Tribunal about what matters can be related conditions. It should be remembered that subclause 20(2) includes provisions that will also require the Tribunal to take into account existing laws and other road transport regulatory systems. It is not intended to overlap or duplicate conditions (such as fatigue laws) which will be set out in the National Heavy Vehicle laws.

90. The Tribunal can make orders in relation to any of the following:

• conditions about minimum remuneration and other entitlements for road transport drivers who are employees, additional to those set out in any modern award relevant to the road transport industry. The relevant modern awards are those referred to in the definition of ‘road transport industry’;

• conditions about minimum rates of remuneration and conditions of engagement for road transport drivers who are independent contractors;

• conditions about industry practices for loading and unloading vehicles, waiting times, working hours, load limits, payment methods and payment periods;

• ways of reducing or removing remuneration-related incentives, pressures, and practices (including practices of participants in the supply chain) that contribute unsafe work practices (for example, speeding or excessive working hours).” [Underlining added]

[210] In the decision making the 2014 RSRO, 54 the RSRT stated the following:

[390] The material before us indicates remuneration related matters contribute to the work practices of road transport drivers.

[391] Inadequate rates of payment pressure road transport drivers to perform more road transport services to supplement their earnings and to speed illegally, exceed working hours limits and/or not take required rest breaks to be able to do so, and/or to perform the extra road transport services while fatigued or under the influence of drugs to combat fatigue.

[392] Various forms of payment by result, such as kilometre rates and trip payments, for the road transport service provided by a road transport driver are an incentive for the road transport driver to speed illegally, exceed working hours limits and/or not take required rest breaks in order to provide the road transport service more quickly so that they can perform other road transport services for payment.

[393] Lengthy delays in payment to contractor drivers, which places pressure on the cash flow they need, can result in road transport services being performed in inappropriately maintained vehicles and contractor drivers speeding illegally, exceeding working hours limits and/or not taking required rest breaks so that they can perform additional road transport services to make up the necessary cash flow. Such delays can also result in contractor drivers performing additional road transport services while fatigued or under the influence of drugs to combat fatigue so as to be able to make up the necessary cash flow.

[394] Speeding illegally, exceeding working hours limits, not taking required rest breaks, driving while fatigued or under the influence of drugs to combat fatigue and performing a road transport service in an inappropriately maintained vehicle are clearly unsafe work practices.”

[211] There is no sound basis for us to consider that these conclusions do not remain valid, and we now have the material before us to further deal with the inadequate rates of payment and various forms of payment by result.

[212] The minimum payments and facilitative provisions clauses and Schedules A and B are provisions in relation to remuneration and related conditions for road transport drivers. They relate to conditions about minimum rates of remuneration and conditions of engagement for contractor drivers, conditions for loading and unloading vehicles, waiting times, working hours and payment methods, and ways of reducing or removing remuneration related incentives, pressures and practices that contribute to unsafe work practices.

[213] The unpaid leave clause which requires certain hirers to provide a contractor driver they engage with a period of unpaid leave is a provision in relation to remuneration and related conditions for road transport drivers. It relates to conditions about minimum rates of remuneration and conditions of engagement for contractor drivers. It also relates to conditions for working hours and payment periods by providing for when a hirer will not require a contractor driver to be available for engagement and is not engaged by the hirer.

[214] The promotion of orders clause requires a hirer of a contractor driver to display this order and the 2014 RSRO and any variation to them and to take all reasonable steps to advise the contractor driver that this order and the 2014 RSRO apply to them and of where the contractor driver can access them. It is a provision in relation to remuneration and related conditions for road transport drivers. It relates to conditions about minimum rates of remuneration and conditions of engagement for contractor drivers. It also relates to ways of reducing or removing remuneration-related incentives, pressures and practices that contribute to unsafe work practices.

[215] The promotion of orders clause relates to ways of reducing or removing remuneration related incentives and pressures that contribute to unsafe work practices. Such incentives and pressures include various forms of payment by result and inadequate rates of payment. The clause does this by providing for the contractor drivers to be informed, through its display and advice requirements, of the remuneration and related conditions in the RSROs which alleviate those incentives and pressures. Such knowledge of the RSRO provided remuneration and related conditions being critical to the effective operation of the remuneration and related conditions. It is integral to the remaining clauses and those in the 2014 RSRO.

[216] The supply chain contracts clause requires some participants in the supply chain in relation to a road transport driver to conduct and facilitate an annual audit of a hirer’s compliance with the minimum payments clauses and associated schedules and to take certain action for non-compliance, and requires hirers to facilitate that audit. It also requires participants in the supply chain to ensure their contracts with other such participants do not prevent or impede a hirer’s compliance with the order. It is a provision in relation to remuneration and related conditions for road transport drivers. It relates to conditions about minimum rates of remuneration and conditions of engagement for contractor drivers. It also relates to ways of reducing or removing remuneration-related incentives, pressures and practices that contribute to unsafe work practices by being a critical means of promoting the effective operation of the minimum payments clauses and the associated clauses and schedules. It is integral to those clauses. This is particularly so having regard to the material before us about the influence of various participants in the supply chain. The RSR Act provides that a RSRO may impose requirements, in relation to a matter for which provision is made in a RSRO, on a hirer of a contractor driver and a participant in the supply chain in relation to the contractor driver. 55

[217] The dispute resolution clause, which merely reiterates the law, is similarly integral. The savings clause emphasises the extent of the effect of any RSRO.

Matters the RSRT must have regard to in deciding whether to make a RSRO

[218] Section 20 of the RSR Act sets out matters the RSRT must have regard to in deciding whether to make a RSRO as follows:

20 Matters the Tribunal must have regard to

(1) In deciding whether to make a road safety remuneration order, the Tribunal must have regard to the following matters:

(a) the need to apply fair, reasonable and enforceable standards in the road transport industry to ensure the safety and fair treatment of road transport drivers;

(b) the likely impact of any order on the viability of businesses in the road transport industry;

(c) the special circumstances of areas that are particularly reliant on the road transport industry, such as rural, regional and other isolated areas;

(d) the likely impact of any order on the national economy and on the movement of freight across the nation;

(e) orders and determinations made by an Expert Panel of the Fair Work Commission in annual wage reviews and the reasons for those orders and determinations;

(f) any modern awards relevant to the road transport industry (see subsection (2)) and the reasons for those awards;

(g) the need to avoid unnecessary overlap with the Fair Work Act 2009 and any other laws prescribed for the purposes of this paragraph;

(h) the need to reduce complexity and for any order to be simple and easy to understand;

(i) the need to minimise the compliance burden on the road transport industry;

(j) any other matter prescribed by the regulations for the purposes of this paragraph.

(2) For the purposes of paragraph (1)(f), each of the awards referred to in the definition of road transport industry (including an award referred to in regulations made for the purposes of paragraph (e) of the definition) is taken to be relevant to the road transport industry.”

[219] The RSR Regulation prescribes the following laws for the purposes of s.20(1)(g) of the RSR Act:

“(a) Work Health and Safety Act 2011;

(b) Work Health and Safety Act 2011 of New South Wales;

(c) Occupational Health and Safety Act 2004 of Victoria;

(d) Work Health and Safety Act 2011 of Queensland;

(e) Occupational Safety and Health Act 1984 of Western Australia;

(f) Occupational Health, Safety and Welfare Act 1986 of South Australia;

(g) Workplace Health and Safety Act 1995 of Tasmania;

(h) Work Health and Safety Act 2011 of the Australian Capital Territory;

(i) Work Health and Safety (National Uniform Legislation) Act 2011 of the Northern Territory.”

[220] In the decision making the 2014 RSRO, 56 the RSRT reached the following conclusion:

[408] The inquiries and evidence from individuals to which we have referred establish the need to apply fair, reasonable and enforceable standards in the road transport industry to ensure the safety and fair treatment of road transport drivers. While some in the road transport industry are appropriately dealing with the safety and fair treatment of road transport drivers, others are not.”

[221] This conclusion remains apt. 57 For example, the more recent submissions, material and comments provided to us indicate that some hirers covered by the application clause of the draft RSRO pay their contractor drivers an amount which is equal to the amount they perceive is set by the market for the provision of that road transport service by a contractor driver. However, that market amount may be less than the standing and running costs, exclusive of any profit, that the contractor driver incurs in providing the road transport service.

[222] Further, some persons covered by the application clause of the draft RSRO presented submissions, material and comments to us to the effect that minimum rates that cover the standing and running costs for a contractor driver in providing a road transport service are fair and reasonable standards to ensure the safety and fair treatment of the contractor driver. However, they exclude from the standing and running costs recovered by those minimum rates, any profit and some entitlements that may be available to an employee road transport driver under relevant modern awards for providing the road transport service.

[223] In our view, such inadequate rates of payment for the road transport service provided by a contractor driver are not fair and reasonable standards to ensure the safety and fair treatment of contractor drivers. As we have indicated earlier, such inadequate rates of payment can lead to unsafe work practices by contractor drivers.

[224] In addition, some hirers require a contractor driver to find a replacement driver before they will allow them to take a period of unpaid leave.

[225] The remaining clauses from our earlier consideration of the clauses in the draft RSRO are directed to the need to apply fair, reasonable and enforceable standards in the road transport industry to ensure the safety and fair treatment of contractor drivers in that part of the road transport industry which was the focus before us. The requirements in the remaining clauses apply fair, reasonable and enforceable standards in the road transport industry.

[226] The minimum payments clauses and associated schedules apply nationally and have been established having regard to the submissions, material and comments before us on the costs of providing road transport services, and the current payments being made to the contractor drivers, as well as the minimum rates in NSW Contract Determinations, the minimum rates proposed by parties in the proceedings before us, including the claim for danger money, and extant methods of payment. They are minimums which are less than some hirers are currently paying and/or are required to pay to their contractor drivers, but more than others are currently paying. The facilitative provisions clause applies nationally and strikes a balance between the needs of hirers and contractor drivers. For example, it requires a contractor driver to be paid for some rest time and waiting time but not all, recognising practices already adopted by some hirers. It also recognises contractor drivers may commence the road transport service from different locations. The unpaid leave clause also applies nationally and also strikes a balance between the needs of hirers and contractor drivers. It is consistent with the leave clauses in the NSW General Carriers Contract Determination and the Transport Industry – Interstate Carriers Contract Determination (NSW), 58 as well as the existing practice of some hirers.

[227] The promotion of orders and supply chain contracts clauses have been revised from those included in the draft RSRO, in recognition of the substantive concerns raised by parties. Nonetheless, they still promote the enforceability of the other clauses and schedules including, to the extent they are relevant, those in the 2014 RSRO.

[228] The promotion of orders clause is a national clause which requires a hirer to display RSROs where practicable and, consistent with all reasonable steps, to give advice to their contractor drivers about access to the RSROs and their application.

[229] The supply chain contracts clause is similarly a national clause which, consistent with all reasonable steps, requires participants in the supply chain to ensure the contracts between them do not prevent or impede a hirer’s compliance with the RSRO. Further, it only requires that annual compliance audits be conducted by certain intermediaries and in respect of some of the provisions of the RSRO. It enables such audits to involve a random sample of a hirer’s records and contains provisions to facilitate such audits. The clause balances means of supporting the minimum payments clauses and associated schedules of any RSRO with practical obligations for hirers and participants in the supply chain.

[230] The dispute resolution clause reiterates the law and the savings clause emphasises the extent of the effect of any RSRO.

[231] All of the remaining clauses have been developed and designed to ensure they are enforceable.

[232] The requirements in these remaining clauses are clearly concerned with ensuring the safety and fair treatment of the road transport drivers. For example, the minimum payments clauses and associated schedules and the facilitative provisions clauses require a contractor driver to be paid minimum rates. They have been established having regard to factors such as the costs of providing road transport services, the market and extant legally required payments, as well as party proposed rates including those for danger money. They require that the minimum rates be paid not just for driving but also for related time and tasks, in circumstances where, as we set out earlier, inadequate rates of payment lead to unsafe work practices by road transport drivers. At the same time, the minimum payments clauses and schedules require both per hour and per kilometre payments to contractor drivers in recognition that, as we indicated earlier, purely payment by results methods of payment are an incentive for road transport drivers to adopt unsafe work practices. The unpaid leave clause requires hirers to allow contractor drivers regularly engaged by them over a 12 month period to take up to four weeks unpaid leave. This enables a contractor driver to take the type of annual leave available to employee road transport drivers, without having to find a replacement driver just as employee road transport drivers do not have to find a replacement. It is concerned with ensuring their safety by enabling them to reap the fatigue reducing benefits of such leave in circumstances where, as we set out earlier, driving while fatigued is an unsafe work practice by road transport drivers. The promotion of orders and supply chain contract clauses are concerned with ensuring the safety and fair treatment of the contractor drivers in promoting knowledge of and adherence to the other clauses and schedules. The dispute resolution clause in turn reminds the contractor drivers and relevant others of an avenue of redress for disputes, which may concern the safety and fair treatment of contractor drivers. The savings clause is concerned with the safety and fair treatment of contractor drivers by emphasising the effect of any RSRO on agreements between hirers and contractor drivers.

[233] The submissions, material and comments before us suggest that in the absence of unsafe work practices, arising from inadequate remuneration and related conditions, the business of some contractor drivers in the road transport industry would be economically unviable. Hirers did not generally suggest to us that their business in the road transport industry was unviable, although some indicated they may consider alternatives to contractor drivers if the minimum payments in the draft RSRO were included in a RSRO.

[234] We consider the detrimental impact, if any, of any RSRO containing the remaining clauses on the viability of businesses in the road transport industry, the national economy and the movement of freight across the nation is likely to be minimal. This is because the clauses have been revised from those in the draft RSRO to take into account the submissions, material and comments before us from those in the road transport industry about such matters. This includes delaying the commencement of any RSRO, in addition to the other revisions reducing their quantum, limiting their application or improving their flexibility. Moreover, given the issues with which the remaining clauses are concerned, the impact on such matters of any RSRO containing the remaining clauses may well be positive as the productivity reducing and cost effects of road accidents and other occupational health and safety problems involving contractor drivers are diminished.

[235] With respect to the special circumstances of areas that are particularly reliant on the road transport industry, such as rural, regional and other isolated areas, we recognise that such areas are more likely to be affected by the road transport services provided by contractor drivers as part of long distance operations in a heavy vehicle and the consequences of inadequate remuneration and related conditions for such contractor drivers. Further, we recognise that, amongst other things, persons who are hirers of contractor drivers and other participants in the supply chain in relation to the road transport drivers in such areas may have fewer resources and engage contractor drivers in different ways to other areas. In addition, such areas are likely to be more prone to natural disaster or other emergency. Taking into account the special circumstances of such areas, the remaining clauses therefore include minimum payments and unpaid leave. They also include provisions such as alternate methods of payment for a road transport service involving a long distance operation and provisions limiting the payment to a contractor driver when waiting because of a natural disaster, enabling the kilometres a contractor driver necessarily travels in providing the road transport service to be counted from a location reasonably specified by the hirer where the contractor driver is not principally engaged at a worksite or depot, requiring the display of a RSRO at a hirer’s work sites or depots where practicable and limiting the application of the annual audit requirements.

[236] The orders and determinations made by the Expert Panel of the FWC in annual wage reviews do not directly apply to contractor drivers. The remaining clauses are not inconsistent with orders and determinations made by the Expert Panel of the FWC, or its predecessor, in annual wage reviews and the reasons for those orders and determinations. Indeed, the minimum payments clauses and associated schedules have been revised from those in the draft RSRO to take into account the orders and determinations not taken into account in the draft RSRO and the reasons for them.

[237] Similarly the modern awards relevant to the road transport industry do not directly apply to contractor drivers. With respect to the modern awards relevant to the road transport industry and the reasons for those awards, the application clause of the remaining clauses is established in part by reference to the industry within the meaning of two of those modern awards being the Road Transport and Distribution Award 2010 59 and the Road Transport (Long Distance Operations) Award 2010,60 bearing in mind the reasons for those modern awards and the focus of the proceedings before us. Further, the remaining clauses are not inconsistent with any of the modern awards relevant to the road transport industry and the reasons for them and have been developed having regard to the content of those modern awards and the reasons for them.

[238] While the other laws prescribed for the purposes of s.20(1)(g) of the RSR Act can apply to contractor drivers, the Fair Work Act 2009 (Cth) (FW Act) does not in the main do so. The remaining clauses do not unnecessarily overlap with the FW Act or the other laws prescribed for the purposes of s.20(1)(g) of the RSR Act. The dispute resolution clause merely refers to the dispute resolution provisions in the RSR Act. Further, none of the remaining clauses are inconsistent with the FW Act or prescribed laws.

[239] There is complexity, affecting simplicity and ease of understanding, in the variety of extant instruments and publications which prescribe or recommend minimum rates or unpaid leave for contractor drivers. A RSRO can have national application. With respect to the need to reduce complexity and for any RSRO to be simple and easy to understand, amongst other things the remaining clauses have national application, the application clause of the remaining clauses has been crafted by reference to relevant modern awards and the remaining clauses aim to use terminology consistent with the RSR Act and modern awards. In addition, we have endeavoured to write the remaining clauses in plain English, specifying clear minimum entitlements and obligations so that they are simple and easy to understand.

[240] The abovementioned variety of instruments affect a compliance burden on the road transport industry. A RSRO can have national application. In regard to the need to minimise the compliance burden on the road transport industry, the remaining clauses have national applicability and, as appropriate, the remaining clauses limit their application, provide flexibility in respect of their requirements and/or leave open the means of their implementation.

[241] There are no other matters prescribed by the regulations for the purposes of s.20(1).

[242] The matters in s.20 of the RSR Act favour the making of a RSRO in the terms of the remaining clauses. We are satisfied having regard to the matters in s.20 of the RSR Act that we should make a RSRO in the terms of the remaining clauses. We are satisfied such a RSRO is consistent with the object of the RSR Act.

Conclusion

[243] In this decision we have set out the research, consultations and hearings leading to it, considered the material and submissions presented to the RSRT in respect of the clauses in the draft RSRO that we published previously and on the other claims proposed by parties, considered the RSRT’s jurisdiction and dealt with the matters the RSRT is required to have regard to in deciding whether to make a RSRO.

[244] As a result, we have decided to make the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 61 as set out in Attachment A to this decision. It is in the terms of the remaining clauses that we earlier set out.

[245] The 2016 RSRO commences on 4 April 2016 and expires on 3 April 2020.

[246] The making of the 2016 RSRO has followed an extensive process that has been outlined in this decision. The decision to make the 2016 RSRO, and the terms set out in it, has been based upon comprehensive consultations, research, evidence, submissions, comments and hearings. The 2016 RSRO is a significant new development for the road transport industry in Australia, including for the contractor drivers falling within its scope, and we anticipate that the 2016 RSRO will be reviewed and amended over time based upon experience and new evidence. We have earlier noted that the RSR Act permits applications to vary an RSRO and the RSRT itself may consider whether a formal evaluation and/or review of the 2016 RSRO should be expressly contained in future annual work programs of the RSRT.

[247] In publishing the draft RSRO, we also published an online draft payments calculator. Such a calculator received considerable support from the parties, together with some constructive feedback. We will shortly publish on the RSRT website a revised online payments calculator consistent with the 2016 RSRO.

Seal of the Road Safety Remuneration Tribunal with member's signature

PRESIDENT

 1   PR350441.

 2   Third Annual Work Program and Others, [2015] RSRTFB 11.

 3   Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014, PR350280.

 4   Annual Work Program and Others, [2013] RSRTFB 7 at [192]-[217] and [428].

 5   Ibid at [61]-[93].

 6   National Transport Commission et al, ‘Safe Payments - Addressing the Underlying Causes of Unsafe Practices in the Road
Transport Industry’, National Transport Commission, October 2008.

 7   Ibid at pp. 18-19 and 21.

 8   Ibid at p. 47.

 9   Second Annual Work Program and Others, [2014] RSRT 1 at [2]-[3].

 10   Ibid at [4]-[5].

 11   Second Annual Work Program and Others, [2014] RSRT 5 at [3].

 12   Third Annual Work Program and Others, [2015] RSRTFB 7.

 13   Third Annual Work Program and Others, [2015] RSRTFB 9 at [4].

 14   Third Annual Work Program and Others, [2015] RSRTFB 11.

 15   Ibid at [58]-[68].

 16   Road Safety Remuneration Act 2012 (Cth), s.27(4)(d).

 17   105 (NSW).

 18   Written submission of Ai Group, NatRoad and Road Freight NSW dated 30 September 2015 at paragraph 104.

 19   Third Annual Work Program and Others, [2015] RSRTFB 11.

 20   TWU submission dated 9 October 2015 at attachment A.

 21   Submission of AiGroup, NatRoad and Road Freight NSW dated 30 September 2015 at paragraph 179.

 22   Written submission of AiGroup, NatRoad and Road Freight NSW dated 30 September 2015 at paragraph 226.

 23   Ibid.

 24   Australian Bureau of Statistics, Consumer Price Index, Australia, September 2015, Catalogue No. 6401.0.

 25   Australian Bureau of Statistics, Average Weekly Earnings, Australia, May 2015, Catalogue No. 6302.0

 26   Australian Bureau of Statistics, Wage Price Index, Australia, September 2015, Catalogue No. 6345.0.

 27   Department of Employment, Trends in Federal Enterprise Bargaining, September 2015.

 28   Witness statement of Greg Smith dated 25 September 2015 at paragraph 77.

 29   Written submission of Linfox and Toll dated 8 December 2015 at paragraph 15-18.

 30   Witness statement of Steven Borg dated 25 September 2015 at paragraph 15.

 31   Witness statement of Alec Trikash dated 25 September 2015 at paragraph 24.

 32   Witness statement of Michael Freestone dated 25 September 2015 at paragraph 32.

 33   Witness statement of Geoffrey Beattie dated 20 October 2015 at paragraph 20.

 34   Witness statement of Greg Smith dated 25 September 2015 at paragraph 9 and Attachment A.

 35   Witness statement of Steve Fanning dated 16 October 2015 at paragraph 23.

 36   Road Safety Remuneration Act 2012 (Cth), s.20.

 37   Written submission of Linfox Australia Pty Ltd dated 25 September 2015 at paragraph 4.1.

 38   Ibid at paragraph 4.4.

 39   Written submissions of VicForests dated 23 September 2015 at p. 3.

 40   Written submissions of AiGroup, NatRoad and Road Freight NSW dated 30 September 2015 at paragraph 115.

 41   Written submission of George Weston Foods dated 24 September 2015 at pp 2-3.

 42   Transcript-in-confidence of 23 October 2015 in Third Annual Work Program and Others at PN1485.

 43   Road Safety Remuneration Act 2012 (Cth), s.27(1).

 44   Written submission of Ai Group, NatRoad and Road Freight NSW dated 30 September 2015 at paragraph 302.

 45   Ibid.

 46   Written submission in reply of ACCI, ABI and the NSW Business Chamber dated 9 October 2015.

 47   Road Safety Remuneration Act 2012 (Cth), s.3.

 48   Road Safety Remuneration Act 2012 (Cth), s.3(b).

 49   Road Safety Remuneration Act 2012 (Cth), s.3(d).

 50   Road Safety Remuneration Act 2012 (Cth), s.3(e).

 51   Road Safety Remuneration Act 2012 (Cth), s.27(1).

 52   O’Grady v Northern Queensland Co Ltd, (1990) 169 CLR 356 at 376.

 53   D’Emden v Pedder, (1904) 1 CLR 91 at 110.

 54   Annual Work Program and Others, [2013] RSRTFB 7.

 55   Road Safety Remuneration Act 2012 (Cth), s.27(3).

 56   Ibid.

 57   See for example, transcript-in-confidence of 23 October 2015 in Third Annual Work Program and Others at PN1498-1499.

 58   305 (NSW).

 59   MA000038.

 60   MA000039.

 61   PR350441.

Printed by authority of the Commonwealth Government Printer

<Price code O, PR350440>

 

ATTACHMENT A


ATTACHMENT B

Persons who presented submissions, material and comments on the
draft road safety remuneration order

● A.J. & K. McCarthy Pty Ltd t/as McCarthy Transport
● Alec Trikash
● Andrew Eastik
● Australian Business Industrial
● Australian Chamber of Commerce and Industry
● Australian Fast Freight Pty Ltd
● Australian Federation of Employers and Industries
● Australian Industry Group, The
● Australian Livestock and Rural Transporters Association Inc
● Australian Long Distance Owners & Drivers Association Inc.
● Australian Road Transport Industrial Organisation (National)
● Australian Trucking Association Ltd
● Bee Jays Haulage Pty Ltd
● Bernard Reid
● Blackburn’s Taxi Trucks Pty. Ltd.
● Booth Transport Pty Ltd
● Border Express Pty Ltd
● CA Arthur & DC Arthur
● Campbell Jackson
● Ceres Agricultural Company Pty Ltd
● Clarend Freight Pty. Ltd. t/as Clarend Transport
● Coles Supermarkets Australia Pty Ltd
● Conplant Pty Ltd
● Consolidated Pastoral Company Pty Limited
● David Laburniy
● David White, George Weston Foods Limited
● Diamond Bros Transport
● DJ & KL Reschke t/as Reschke Transport
● D.M Vater & Vater Group t/as AW Vater & Co
● Fletcher International Exports Pty Ltd
● Frank Arcidiaco
● Garden Grove Haulage Pty Ltd
● Garners Interstate Pty Ltd
● Geoffrey Beattie, Patrick Autocare Pty Limited
● George Weston Foods Limited
● Grant Harris Haulage Pty Ltd
● Greg Smith
● Hi-Trans Express Pty Ltd
● Individual 1 - Contractor Driver
● Individual 2 - Transport Operator
● JB Hi-Fi Group Pty Ltd
● Joel Brunning
● Kevin Welch
● KJM Contractors Pty Ltd
● K. & S. Freighters Pty. Ltd.
● Linfox Australia Pty Ltd
● Livestock & Rural Transporters Association of South Australia Incorporated
● Livestock and Rural Transport Association of Western Australia (Inc)
● Master Builders Australia Limited
● Mick Daley
● Michael Freestone
● Michael Rawling
● McVey’s Transport Pty Limited
● Minchen Wells Pastoral Pty Ltd
● Miroslav Vujica
● MJ & SL Kennedy
● National Farmers’ Federation Limited
● National Independent Trucking Association Inc.
● National Road Transport Association Limited t/as NatRoad Limited
● Nick Leon
● NSW ATA Pty Ltd t/as Road Freight NSW
● NSW Business Chamber Limited
● NT Road Transport Association
● Offenhauser Angi & Co Pty Ltd
● Phil Crogan & Peter Smith
● Pross Haulage Pty Ltd
● Quinn Transport Pty Ltd
● Cushnie Nominees Pty Ltd & Lucifer Investments Pty Ltd t/as RCFA Agency Partnership
● Retail Council Limited
● Ross Longmire
● Ri-Industries Developments Pty. Ltd.
● Robert Mitchell Transport Pty Ltd
● Ross Clarke
● S. Kidman & Co Ltd
● Senator Glenn Sterle
● Senator John Williams
● Shane Court
● South Australian Employers’ Chamber of Commerce and Industry Inc t/as Business SA
● South Australian Road Transport Association Inc.
● Steven Borg
● Steven Corcoran
● Steve Fanning, McAleese Group
● Steven Melichar
● Sue Posnakidis
● Susan Rechenberg-Dupe, Godfrey Hirst Australia Pty Ltd
● Sylvan Springs Estates Pty Ltd
● Tantusk Pty. Limited t/as Tantusk Pty Ltd
● Tasmanian Chamber of Commerce and Industry
● Tatiara Transport Pty Ltd
● The Trustee for the DT & AJ Beinke Family Trust t/as Beinke Haulage
● The Trustee for the Sweeney Family Trust
● The Trustee of the Beattie Transport Trust t/as Beattie Transport
● TNT Australia Pty Ltd
● Toll Holdings Limited
● Transport Workers’ Union of Australia
● Trevor Reid
● VicForests
● Victorian Transport Association Inc.
● Victoria Sherwood
● Vin Callery Transport Pty Ltd
● Whiteline Transport (Aust.) Pty Ltd
● Winston Cutts