ROAD TO REPEAL
Emboldened by staunch industry resistance to the RSRT, Canberra rode to the rescue after efforts failed to halt the RSRO
Emboldened by industry resistance to the Road Safety Remuneration Tribunal, Canberra stepped in after efforts failed to halt the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016. On April 1, the eve of the tribunal’s decision on the implementation of the order, the government released two independent reports critical of the Road Safety Remuneration System
In December 2015, the Road Safety Remuneration Tribunal ( RSRT) made a world first order to mandate compulsory hourly and kilometre payments for contractor drivers involved in linehaul and supermarket work, starting April 4 this year.
The move was designed to provide contractors with a safe and sustainable rate to prevent them from cutting corners – such as foregoing maintenance and working longer – to make ends meet.
The Contractor Driver Minimum Payments
Road Safety Remuneration Order 2016 was due to run until at least April 3, 2020, and included annual rate increases of two per cent.
Under the ruling, contractor drivers were guaranteed payment within 30 days for time spent waiting, loading or unloading and time spent inspecting or attending to a load, refuelling a truck, recording information or completing a document, and waiting in a location because of a natural disaster.
All parties in the supply chain were accountable for making sure rates in contracts were sufficient to ensure owner-drivers receive the minimum rate, which was to vary based on the work being performed and the type vehicle being used.
The minimum rates order was based on studies that linked road safety with driver remuneration, with advocates of the scheme claiming that setting standard minimum pay for drivers would usher resourcing and supply chain efficiency.
Some reports have indicated that drivers can wait up to 120 days to receive payments, which puts them under financial pressure that often results in them cutting corners to finish a job and forego standard safety procedures in order to pick up more work.
Less than a few weeks before the order was due to start, the union announced its plan to push for even higher rates once minimum fixed rates were implemented.
The Order came in the face of a joint submission by the nation’s two biggest transport companies, Toll and Linfox, urging the tribunal to “tread cautiously” before regulating the sector.
While the companies expressed support for minimum pay rates for linehaul drivers, their submission argued that setting rates for linehaul work would be difficult given the numerous types of vehicles used in the sector, the differing fuel burn rates due to the various types of freight transported, and the different amounts paid for trips between regional and capital cities.
Having analysed the impact of the order on business, the two companies said they would
contemplate reducing its contractor driver fleet to offset the increase in operational costs as a result of higher pay rates for drivers.
Critics have accused the RSRT of taking a ‘one size fits all’ approach without considering the complexities of the sector to establish appropriate rules.
Opponents of the order have said the scheme would lead to many mum and dad businesses losing their livelihoods.
NatRoad was one of the first industry bodies to come out swinging against the order, claiming it would not only ruin many small transport businesses and ownerdrivers, but also significantly increase the price of consumer goods – claims that were rubbished by the union.
ATN spoke to operators who highlighted what they saw as the RSRO’s flawed approach making it impossible for owner-drivers to contract single loads or short-term work.
Others said they needed more time to make operational and administrative adjustments to comply with the significant transformational changes.
Issues such as ambiguity in the terms used in the order, lack of a verification system to monitor drivers’ hours and kilometres, inflexible existing contracts to offset costs, and the overall reorganisation costs posed a threat to businesses remaining competitive in the market.
Some operators had also expressed philosophical objection to legislative control over private businesses.
With industry players reporting difficulties in finding details about the new rules, the Fair Work Ombudsman announced its role in educating and informing the industry, and
monitoring compliance with the Road Safety
Remuneration Act 2012.
It was followed by persistent complaints about lack of useful information and confusion with regard to the complexities of the order.
During an industry and customer breakfast organised by the Australian Road Transport Industrial Organisation (ARTIO) in Sydney on February 9, RSRT president Jennifer Acton outlined the bare bones of the order, leaving attendees disgruntled over the lack of clear guidance.
On March 3, the RSRT launched an online payment calculator with an aim to assist drivers, hirers and participants in the supply chain to calculate minimum payments under the new order.
However, the Australian Industry Group (Ai Group) slammed the tribunal for releasing the online pay calculator too late and complained that hirers did not have enough time to implement appropriate administrative arrangements.
Less than a fortnight before the due date, the FWO was still trying to come to grips with the technicalities of the scheme.
The one simplification the Ombudsman was able to offer was to redefine the meaning of the term ‘contractor driver’, as proposed by the ARTIO.
The new meaning stated that work performed by a contractor driver’s employee driving another truck also owned by the contractor driver would come under the ‘safe rates’ RSRO.
Less than a month before the scheme was due to start, the tribunal announced a hearing to deal with applications from the Australian Long Distance Owner Drivers Association (ALDODA), the National Road Freighters Association (NRFA), and NatRoad.
The hearing was scheduled for March 15 in Brisbane, with video links to interstate.
In the days following, mobilisation against the ‘safe rates’ RSRO stepped up another gear, with more and more industry bodies linking arms to have the order delayed.
The Ai Group, in association with NatRoad, also submitted an application to stay the start of the order and have in place transitional arrangements to phrase-in the new rates.
It was followed by the Australian Livestock and Livestock Transporters Association (ALRTA), National Farmers Federation (NFF) and the Council of Small Business Associations (COSBOA) joining the bid to stay the order indefinitely, or at the very least delay the order for six months.
Industry participants also highlighted the impact of expected market upheaval on ownerdrivers was being ignored.
South Australian Road Transport Association (SARTA) president Steve Shearer highlighted that the order could force pressured owner-drivers to extreme actions including suicide.
TWU members launched a rally to champion the RSRO in downtown Adelaide.
It was followed by a rally of close to 100 people and convoy by owner-drivers in Berrinba, Queensland to protest against the order.
The rally attracted political support, with Queensland senator Glenn Lazarus speaking at the event to declare he would fight against the RSRT’s plans.
A second such rally took place in Adelaide, with transport operators, ministers and members of the SARTA protesting outside the Parliament House followed by an antiRSRT convoy.
Following the Brisbane hearing, the RSRT set aside the following two weeks to deal with arguments related to the order.
Acton issued a draft variation dealing with various proposals concerning start date and transitional provisions, including the Ai Group’s proposal to phase-in the new rules over a 36-month period.
The tribunal received a huge number of submissions related to the draft, with most requesting to defer the order.
Parties, whose submissions were deemed to need further investigation, were asked to appear for cross-examination over a three-day period during the Easter holidays.
With a threat of six months jail time for nonattendees, the hearings sparked widespread criticism from the industry.
Changing its original stance, the union said it was not opposed to the proposed October 1 deadline. It also sought changes to the RSRT’s orders to preserve split loads and back loads.
The TWU submission, titled TWU1, was backed by Linfox and Toll, and partially supported by the Ai Group.
However, most of the submissions rejected the proposal on the details, or because it arrived outside previously understood limits, or because of its narrow provenance – but some opposed it for interfering with the RSRO as it then stood.
The Australian Chamber of Commerce and Industry, as well as the NSW Business Chamber and its affiliate, Australian Business Industrial, presented a submission to the RSRT stating there was widespread confusion and anxiety within the industry.
While the federal government hitched itself to the industry bandwagon to stall the order, it was powerless to stop the scheme from going ahead.
The government warned the tribunal of inadvertent non-compliance by transport companies that could lead to fines up to $54,000 in its submission, backed by employment minister Michaelia Cash and transport minister Darren Chester.
As the office’s first order of business, Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell voiced her opinion against the RSRO.
A former small business owner, politician and industry body leader, Carnell told ATN the RSRT’s intrusion into a sector that had been largely uncharted by the industrial relations system was a surprise.
Finance brokers raised alarm over the impact of the order on the Australian economy.
The Commercial Asset Finance Brokers Association of Australia (CAFBA) said it received widespread client concern about their vehicle and other loan situations in future, causing it to propose an indefinite stay to the order.
On April 1, the eve of the tribunal’s decision regarding the implementation of the order, the government released two longburied reports examining the Road Safety Remuneration System.
The Price water house Coopers’ (PwC )2016 report painted an unflattering assessment of the tribunal, including arguing its actions were doing more harm than good and that it should be axed.
It claimed the RSRT would cost the economy more than $2 billion over 15 years, but deliver nothing close to that figure in terms of benefits.
The review added that the money spent on the RSRT since it opened its doors in 2012 had not been worth it.
PwC, which authored a regulatory impact statement on the RSRT before its introduction, said it could not substantiate the ongoing need for the system.
The 2014 Jaguar Consulting report was finally unveiled. It recommended sweeping changes to the structure of the agency.
Report author Rex Deighton-Smith said the evidence used to justify the link between low rates of pay and safety was flimsy at best and that existing measures such as chain of responsibility (COR) and the National Heavy Vehicle Regulator (NHVR) could be relied upon to improve safety in the trucking industry.
The first recommendation stated that RSR System should not continue in its current form, the second stated that the provisions of the Act authorising the tribunal to set mandatory rates should be repealed.
ON THE ATTACK
The RSRT decided not to delay the introduction of the order, ruling in favour of the due date of April 4.
The tribunal used its decision report to take its critics to task, accusing them of
creating uncertainty and confusion within the community. It also slammed the Ombudsman for not offering enough information to affected parties.
However, it highlighted that the onus was on the individuals to know what was happening.
The ruling invoked condemnation from industry bodies, which accused the tribunal of overlooking the impact of the order on small businesses.
Later that night, the federal court in Brisbane granted a temporary stay on the order following an urgent application by the ATA and NatRoad.
Meanwhile, the government invited suggestions for best possible solutions to the issue.
On April 7, the Department of Employment announced the schedule of the two-hour consultations forums, held at various locations around Australia from April 11-15.
That same evening, the Federal Court in Brisbane lifted the temporary stay on the order, on the ground that there was a “weak prima facie case and no exceptional circumstances existed to warrant the continuation of the stay”. The order was in force, effective immediately.
NatRoad announced its disappointment in being priced out of the war, stating it was no longer financially viable for the body to take further legal action.
Private contractor group Independent Contractors Australia announced its intention to take the case to the High Court, making a public plea for funding to support the legal battle.
The ATA called for immediate government intervention in the matter.
It supported Cash’s call urging ownerdrivers to bring their trucks and grievances to Canberra in an anti-RSRT rally on Sunday, April 17.
ATA later reported that the convoy included close to 200 trucks.
With the start of a long election looming and the need to convince independent senators a high priority, prime minister Malcolm Turnbull attacked opposition leader Bill Shorten for having formed a body that could lead to the end of hundreds of “mum and dad businesses”.
“Now what we have seen is this RSRT, this tribunal established by the Labor Party, established by Bill Shorten, has produced an order which will drive owner-drivers out of business,” Turnbull said.
“It was a piece of legislation that has had nothing to do with safety, everything to do with getting small businesses, self-employed people, the enterprising family businesses of Australia off the roads.”
Shorten returned fire, while holding out the possibility of a bipartisan approach.
“There’s a clear correlation between low payment of drivers driving through the night, employee owner drivers, and indeed poor safety,” he said.
“We call upon Mr Turnbull to work with the Labor Party in ensuring a fair deal for Australia’s truck drivers and indeed Australia’s road users.”
The PM announced that if re-elected, his party would terminate the RSRT.
Two days later, the government announced its plan to introduce legislation to axe the tribunal when the Parliament reconvened in the week beginning April 18.
The announced came after independent senator Jacqui Lambie joined senators Glenn Lazarus, David Leyonhjelm and Bob Day in calling for an immediate abolition of the tribunal and the RSRO.
The government set up a temporary hotline through the Department of Social Services to provide targeted financial advice to ownerdrivers who had been negatively affected by the payment order.
The union made a fresh call to the RSRT to delay the order to January 1 next year – a move NatRoad termed a “politically motivated monumental backflip”.
Senator Ricky Muir, the union and supporters of the order including Longhaul Drivers Association (LDA) president Brian Turpie asked politicians to weigh the concerns of all sides before making a decision.
On April 18, the Coalition tabled two proposals – the first to abolish the RSRT and its related minimum rates order, and second, to delay the implementation date to January 1 next year.
The federal parliament voted in favour of the abolition of the tribunal, 36 votes to 32.
The vote meant the RSRT and the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 was to be terminated effective Thursday, April 21.
The TWU has promised to continue its fight for the livelihoods and safety of truck drivers.
On April 20, it organised a rally in Canberra with families of drivers who lost their lives in road accidents.
It accused the ATA, of which it is a member, of ignoring the concerns of industry members and supporting big companies.
With Labor still in favour of the tribunal, if it comes to power in the July elections, the spectres of the rates regime could resurface with the tables turned.
ABOVE: Deputy prime minister Barnaby Joyce, front right, with protesters in Canberra OPPOSITE: Opponents to the RSRO turned up in numbers with their trucks
BELOW: Independent senator Glenn Lazarus addresses an anti-RSRT rally in Queensland
TOP: Anti-RSRT sentiments on trucks outside its headquarters in Melbourne during the Easter hearings; ABOVE : RSRT president Jennifer Acton speaks to the industry